In addressing the continuing issue of a housing shortage, Richard Ogden, Chairman of Buildoffsite is still waiting for a modern, innovative approach to delivering the homes that the UK needs
Almost three years ago two of my colleagues, arguably some of the sharpest people in the construction industry, Professor Nick Whitehouse of Oxford Brookes University and Professor John Miles of Cambridge University wrote a report – The Offsite Housing Review.
This was a report for government that reviewed the UK’s growing housing shortage and the contribution that offsite methods of construction could make to increase the supply of new homes. A landmark publication, not just for the thoughtful analysis of what was clearly a rapidly escalating problem, but also for the considered recommendations for improving the capacity of the offsite industry to deliver the high performance, sustainable homes that we need. Anyone who has an interest in the housing challenge the UK is facing should read the report.
So here we are three years on. We have had a tsunami of political manifestos each with housing high up the agenda, a general election, a change of government, a change of Prime Minister and a change of ministers, plus a political change in London, but with regard to the looming housing crisis, nothing has changed.
Well, actually it is not quite true to say that nothing has changed. The reality is that matters have actually got worse. The UK is still failing to build anything like the number of homes we need and we are still firmly on track for a shortage of something like 2 million homes. I am still waiting for someone to explain to me why in France and Germany — countries with broadly similar populations the rate of house building — is running at two or three times that of the UK.
The pending shortfall in the UK is shocking and disguises the simple fact that tens of thousands and possibly hundreds of thousands of our fellow citizens are living in cramped, overcrowded and unhealthy conditions with little if any prospect of things getting better any time soon.
This is an indictment of UK housing policy. A lack of a decent home denies families and individuals security and opportunity with inevitable negative implications for wellbeing and a major drag on economic and social progress.
It should be obvious to our political leaders of all stripes that this problem is not going to go away. People will not stop wanting to come to work and live in the UK. The population will continue to grow. The number of people living alone will increase as will the number of households being formed. The rich will always be well-housed, but not everyone is fortunate enough to be in this position. For too many the prospects are unappealing with a failure of policy leading to some deeply uncomfortable outcomes including serious overcrowding, illegal sub-letting, beds in sheds, forced evictions, homelessness and so on. None of us can afford to feel comfortable about this increasing reality.
What response can we expect from government? We can call for vision, leadership and action, but in reality what we get are warm words particularly at election time and sound bites in the media, but no impactful practical measures.
What is currently happening to deliver new homes? Housebuilders are the largest supplier of new homes, and most of these will be for sale on the open market. Housebuilders are in a business that makes money from turning a profit on buying and developing land for sale. The rate at which they build out a site will precisely match local demand. What housebuilders don’t do – it’s not their job – is to deliver UK housing policy. That is what politicians are paid to do.
The private rented sector continues to invest substantially in new developments. The role of the financial institutions is most welcome and as long-term landlords, their investment in new homes is setting new standards in terms of the quality and performance over time. Unsurprisingly all this comes at a time when rent levels are substantially above what is affordable for many.
Registered providers including both housing associations and local authorities are increasingly looking to develop new homes for private sale or for private rent to generate profits to subsidise other activities. This change of focus from housing provision for social rent to that of developers for profit means that relatively few new homes for affordable rent are being provided. There is government support for new starter homes, but this does not help with meeting general housing need.
Holding us back even further is a construction industry that, for understandable reasons, is wedded to traditional methods of construction that too often result in homes that are handed over with defects, do not deliver on thermal performance and take far too long to build.
This way of building is not inevitable, and it is certainly not the way things are done in other countries where a more competitive housing market applies. In the UK new homes are in many cases built down to the minimum standards set out in Building Regulations. The hard reality is that unless you are in the incredibly privileged position of being a self-build client and you need to live in a specific area, your choice will be whether you buy or rent whatever homes happen to be available on the local market. It is genuinely a case of location, location, location. Consumers will rarely have any choice in the quality of a build – they will get what someone else has decided should be available. Looking at this dispassionately it is hard but conclude that this almost total lack of competition in the housing market disadvantages and denies consumers any real choice. In the absence of an effective consumer voice, the industry is not subject to challenge and is, therefore, unlikely to be driven to improve. I can think of no other industry that operates in this distorted way. If, when you have read this, you go back and substitute the word “cars” for the word “homes” you will get what I am driving at.
The housebuilding industry can be much more efficient and responsive to customers’ needs. The model is well established in Scandinavia, Japan and elsewhere, and involves producing either complete homes or substantial components in a factory, with the consumer at the centre of the process. A transition to this model would address issues of quality, speed of delivery and rapid installation on site. For this approach to become mainstream in the UK, opportunities to compete for substantial projects would have to increase, in turn, uncovering new solutions.
Finding an answer to the shortage of new homes would benefit the UK government deciding on a plan of action: Plan A – finally accepting that this endemic problem requires their active participation closely coupled with an acceptance that the scale of the challenge requires an industrial response – an offsite enabled response. There really is no Plan B…
Buildoffsite will be working hard to promote the business and operational case for the adoption of offsite methods for the delivery of new homes and for all other building and civil engineering structures. You can follow us on Twitter @Buildoffsite or see more information on our website: www.buildoffsite.com
Finally, a plug for the UK’s most important offsite construction exhibition and conference programme. The Offsite Construction Show takes place at ExCel in London’s Docklands on 12 and 13 October 2016. This free to attend event will showcase the latest offsite solutions and provide a fantastic opportunity for networking and knowledge exchange for those who want to know more about what a 21st-century construction industry will look like.
Buildoffsite will be hosting a two-day programme of seminars and masterclasses. For more information check out the OSCS website www.off-siteshow.com
I’ll be there, and I hope you will too!
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Richard Ogden
Chairman
Buildoffsite
Tel: +44 (0)20 7549 3306
