Cost implications of a distant dream
In 2008, the Government set some challenging targets for house building in England.
BCIS received funding from RICS policy department and Department for Communities and Local Government (CLG), to investigate the cost ramifications of meeting the targets. Our initial proposal was set against the background of a growing economy and busy construction industry.
And then the world changed...
When the volume targets of 240,000 a year by 2016 were set, housing starts were running at 168,000 a year; this has fallen to 82,000 in the last year.
CLG were keen that we continue with the study and look at the sustainability targets as well as the volume targets.
The initial report was completed in June 2009 and some additional scenario analysis carried out after that.
With the CLG's permission, the Cost implications of Housing Targets report is now available. The views expressed in the report are those of BCIS not the other funders.
Based on all the assumptions in the report, some of which have already been overtaken by events, the cost per dwelling would rise by over 30% by 2020.
Demand pressures account for 40% of this increase (ie 13%). In the current climate, this impact will be neutralised by the general fall in construction prices. Testing the model suggests that the impact of increased housing construction is similar against a background of falling or rising demand for construction generally.
Meeting the sustainability targets accounts for the other 60% of the increase, i.e zero carbon by 2016 will add 17% to the average cost per dwelling. This estimate is based on previous CLG reports into the cost of various solutions to zero carbon. It is still not clear how mass housing can be delivered at zero carbon and indeed there has been some changes to the requirements for onsite generation, which may now be off-set by other 'allowable solutions'.
The report looks at the impact, on cost, of the take-up of sustainable technologies and concludes that those that are currently being proposed have well developed international markets and that increased demand from the UK will not significantly impact on their cost. However, the availability of properly trained staff to install these technologies and construct buildings differently may well be a constraint on our ability to meet the targets.
The world may have changed, but as we come out of the recession, the demand to rapidly increase the house building programme will return and new targets will be set. the target for all houses to be zero carbon by 2016 has never gone away and will be enshrined in legislation.
And then the world changed...
When the volume targets of 240,000 a year by 2016 were set, housing starts were running at 168,000 a year; this has fallen to 82,000 in the last year.
CLG were keen that we continue with the study and look at the sustainability targets as well as the volume targets.
The initial report was completed in June 2009 and some additional scenario analysis carried out after that.
With the CLG's permission, the Cost implications of Housing Targets report is now available. The views expressed in the report are those of BCIS not the other funders.
Based on all the assumptions in the report, some of which have already been overtaken by events, the cost per dwelling would rise by over 30% by 2020.
Demand pressures account for 40% of this increase (ie 13%). In the current climate, this impact will be neutralised by the general fall in construction prices. Testing the model suggests that the impact of increased housing construction is similar against a background of falling or rising demand for construction generally.
Meeting the sustainability targets accounts for the other 60% of the increase, i.e zero carbon by 2016 will add 17% to the average cost per dwelling. This estimate is based on previous CLG reports into the cost of various solutions to zero carbon. It is still not clear how mass housing can be delivered at zero carbon and indeed there has been some changes to the requirements for onsite generation, which may now be off-set by other 'allowable solutions'.
The report looks at the impact, on cost, of the take-up of sustainable technologies and concludes that those that are currently being proposed have well developed international markets and that increased demand from the UK will not significantly impact on their cost. However, the availability of properly trained staff to install these technologies and construct buildings differently may well be a constraint on our ability to meet the targets.
The world may have changed, but as we come out of the recession, the demand to rapidly increase the house building programme will return and new targets will be set. the target for all houses to be zero carbon by 2016 has never gone away and will be enshrined in legislation.
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