Skip to main content

Sweeties from the Political Parties?

In the run-up to the General Election on 12th December 2019, we are being offered incentives by the political parties that are wonderful at first glance but are want to raise eyebrows on further scrutiny.

I won't get into 'Free Broadband for All' but couldn't let the manifesto pledge of 100,000 social/affordable homes pass by without comment.

Housebuilder News reported on 21st November:

Labour plans to build 100,000 council homes a year by the end of 2024 according to its election manifesto published today.
It will also build “at least” 50,000 additional genuinely affordable homes a year through housing associations by the end of the parliament
The party says the homes will be built to cutting edge design and green standards citing the Stirling Prize award-winning Goldsmith Street council development in Norwich as an example of what Labour’s modern council housing could look like.


The Goldsmith Street scheme in Norwich has been built to PassiveHaus standards and comprises a 1.2ha/2.96 acre site with 93 dwellings (45 houses and 48 apartments). The total cost of this scheme has been quoted as £17.3 million pounds and it is suggested by RIBA that PassiveHaus adds 10-15% to build costs. They further report that build-costs equate to £1,875 / sq m.

If you relate these build costs to the pledged 100,000 homes and if you assume similar specifications and sizes to the Goldsmith Street scheme then the cost of building these homes would be £18,562,50,000 - or eighteen billion five hundred sixty-two million five hundred thousand pounds. There is no land cost added to this which in the case of the Norwich development I'd guess at £50,000 per plot which adds £465,000 to the overall costs. There is no allowance for finance costs.
Where is the £18.5 billion going to come from each year up to 2024?
Where is the land to build these homes on going to come from and how will it be purchased?
What's going to happen to the usual planning conditions such as archaeological investigation and contamination? Recent land transactions we are aware of have seen archaeology costs spiral from £10,000 to £90,000!
Looking at this from another angle how will the UK building industry manage to actually build an additional 100,000 homes each year? That's 8,333 each and every month.
Knight Frank's Residential Research department produce a Housebuilding Report and the most recent for 2018 is available at https://www.knightfrank.com/research/uk-housebuilding-report-2018-5680.aspx
The report details the UK housebuilding industry's forecast for the year and the underlying trends. After reading it and factoring in modern construction methods using off-site build I'm still dubious that the industry can actually build an additional 100,000 homes.


Comments

Post a Comment

Popular posts from this blog

House builders discuss 95% mortgages with lenders

So the house builders and the lenders have had a meeting to discuss how they can create 95% mortgages. Basically a good thing, as you would imagine most estate agents would say. But what proportion of the housing Market is represented by new homes sales to first time buyers? Also any first time buyer who purchases a new home is then a cost to the second hand Market of who knows how many sales! If I think back 30 years my wife and I as first time buyers were providing a deposit of 10%. To do this we sold her car, saved up by not going out as much and generally committed ourselves to the task of buying our first home together. Ah, you might say, but house prices were so much cheaper then. True but my salary was just under £2,000 per annum with the prospect of perhaps another £1,000 in commission from selling at lease 6 houses per month personally. The first 4 didn't count towards commission but were to cover my costs to my employer! I personally don't think 95% mortgages are ...
3 comments
Read more

2012: What lays ahead for homes and property?

I’m writing this on 26th December which some might say is a bad time for predictions as the stomach is still churning and digesting yesterday’s Turkey dinner and copious mounts of alcoholic beverages. On the other hand it may focus my mind on whether the next 12 months are going to give any of us that ‘full’ feeling. The danger with property market predictions is that they are generalisations.  When the Halifax or Nationwide make their comments they are talking about the UK as a whole. When I make a prediction I’m talking about our particular little area of the country - incidentally East Cambridgeshire made it to No.4 in the ten best places to live in the UK http://bit.ly/vf0C4v (according to Simon Ward of www.lovemoney.com   using Halifax Quality of Life survey data, and who am I to doubt him!) The London market is buoyant with foreign investors buying and some reports will say that prices moved up even in the closing months of 2011.  The north of the country has over...
Post a Comment
Read more