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Pop-up housing could cut cost of London’s rental market & help UK housing Crisis


FEB
26


Housing rental price on the increase 


With latest Index of Private Housing Rental Prices: , showing Private rental prices paid by tenants in Great Britain rose by 2.6% in the 12 months to January 2016, up from 2.5% in the year to December 2015.Private rental prices grew by 2.7% in England, 0.3% in Wales and 0.8% in Scotland in the 12 months to January 2016.rental prices increasing the most in London (3.9%).

Figure 9: IPHRP percentage change over the 12 months to January 2016 by English region


EnglandNorth EastNorth WestYorkshire & the HumberEast MidlandsWest MidlandsEastLondonSouth EastSouth West
00.511.522.533.544.5
%
Source: Office for National Statistics

Figure 6: IPHRP indices: England, January 2005 to January 2016

Index values (January 2011=100)

England
England excluding London
Jan 2016Jan 2014Jan 2012Jan 2010Jan 2008Jan 2006
859095100105110115
Index values
Source: Office for National Statistics

Renters in London are now paying nearly half of their gross income on rent. The figures, compiled by the House of Commons Library for Labour’s Shadow London Minister, Sadiq Khan, show that the media private rent in London now consumes 49% of the median wage. In some parts of London it is far higher – In Kensington and Chelsea rents consumes 69% of income, in Westminster it is 59% and in Hackney it is 54%.





Rent costs more than half of income in 13 of London’s 32 Borough’s. To make matters worse, these figures are before tax is deducted. In reality Londoners are paying significantly more than half of their take home pay on rent.

Rent Stabilisation Measures & Landlord Response Research By University of Cambridge  found ,Some 60% of London landlords would reduce the size of their property portfolios in the event of a rent freeze, new research has found.

London Housing Crisis

Cost of Building
A New report called Pop-uP housing shows high quality homes are quick and cost-effective to build

High quality pop-up homes could cut the price of renting in London by a third and provide fast, cost-effective building solutions across the capital, a new report shows.


This week saw three national house builders, post bumper profits in their yearly reports to the city.
At an average selling price of new build home was £254,000, up 11% higher the £229,200 average price in the first half of the prior financial year 2014
The Group's average selling price of new build home was £199,127 up 4.5% higher (2014: £190,533).

Average sales price increased by 7% to £231,600 (2014: £216,600) with the average sales price of private legal completions (excluding PRS) 8% higher at £272,100 (2014: £250,800).  

Pop uP housing Y:Cube housing scheme7 for the homeless in Mitcham, which was designed in collaboration with the YMCA London South West and part-funded by the Mayor. This 36-unit project was manufactured in a Derbyshire factory and then transported onsite. The whole process took five weeks to build, including four days on site, at an average cost of £50,000 per unit

On the 26 January 2016, the first ever comprehensive register of public land in London,revealing 40,000 sites across the Capital including the capacity to deliver a minimum of 130,000 homes, was published by the London Land Commission.





The popup report concentrates on land owned publicly ,with an imaginative new way of tackling London’housing shortage, in order to deliver quality homes at high speed and low cost, should and can rolled out nationally



PopUp House is an innovative research and design office specialized in the construction industry. Their aim is to build high performance and well insulated buildings effectively and efficiently.

Land Value

Many would argue that the price / plots of land has increases in value year as so add to cost of building .But its a big one much of the land acquired by national house builder is bought in advance ,that excuse and land banking counters their objections also. 



This investment is focused in the Group's targeted, primarily Southern, geographies within which the Group believes there is strong market demand for housing and sufficient supply of land to fulfil its strategic ambitions.  Our rigorous acquisition criteria are applied to every proposal, reflecting not only the anticipated profit margin and return on capital employed, but also site specific risks and geographic concentration risk.



2015

2014

Consented plots added

6,058

7,300

Sites added

35

42

Sites owned at period end

142

128

Plots in consented land bank at period end

19,814

18,062


Average consented land plot cost


£49,200


£46,600

Proportion in South of England

76%

75%



In the year the Group added to the land bank 6,058 consented plots on 35 sites at a cost of £343 million.  These plots have an estimated future revenue of c£1,700 million and an estimated future gross profit potential of c£440 million based on sales prices and build costs at the point of appraisal, delivering an estimated future gross margin of 26.4%.  The average return on capital employed of the land acquired based on investment appraisal at the time of acquisition is c28%.

The estimated gross profit potential of the Group's consented land bank plots as at 31 December 2015, based on prevailing sales prices and build costs, has increased to £1,247 million with a gross margin of 25.5% (31 December 2014: £1,017 million at 25.2%).  Written down land in the land bank at 31 December 2015 made up only 2% of plots (31 December 2014: 6%).[Source Bovis Homes Group PLC final year for 31 DECEMBER 2015]

Super Market / Retail Land 


Supermarkets are still sitting on enough land to build thousands of homes -standing empty because of inline drift making megastores redundant

Shoppers are turning to convenience stores, budget supermarkets and online shopping instead of superstores ,The big four supermarkets have 46.61 million square feet of space that they had bought with the intention of building new stores. But just 2.8million square feet is being built on – 20 per cent down on last year, according to property agent CBRE. The empty land could be enough to build in the region of 13,500 family homes.



For years supermarkets raced to gobble up retail space up and down the country as shoppers continued to show an "apparently "insatiable appetite for large out-of-town superstores.Some 10,000 homes could be built on the sites in London, the South East and Bath.

Supermarket giant Tesco last year ,sold off more than a dozen sites that it no longer wanted to develop to a property company in a £250m deal.

While this is a start ,surely this type of land /remaining ,should be giving to house building projects like Y Cube and smaller SME builders who still exist despite have a dramtic decline post 2007 crisis, rather than farmed out to big builders.


Government to sell Prisons for housing






The government has published details of 600 acres of surplus public sector land as part of its drive to deliver tens of thousands of new homes and boost local growth.

Housing Minister Brandon Lewis said it was further proof that the government was getting the country building again and urged developers to seize the opportunity and build the homes hard-working people want and deserve.



Land Use - Previously Developed Land, Londons Boroughs

An estimate of the amount of previously-developed (or brownfield) land in England which may be available for re-development, and also an estimate of the potential number of dwellings that could be provided on this land.

Download from DCLG website


 Data and Resources






Government building land use


 A lot of work by people, employed within the civil service, could easily be done from home, by freeing up  buildings for housing, would also help alleviate, land shortage in key cities. 



The number of people working from home has risen, to its highest level since records began, according to the Office for National Statistics (ONS).

There were 4.2 million UK home workers in the first three months of 2014, amounting to 13.9% of the workforce.

The ONS said that was the highest proportion since measurements started in 1998.




Skilled Labour / Shortage ?

The three builders all complain of lack of skilled shortage , though using the high quality  modular designs like Y cube can be be assembled, in  5 weeks.




not that much of a decline when you go back to 1982 








Could the army be brought in, for their next role, after their amazing work in Germany  to bridge the divide of 0.8 % shortfall in construction jobs ? 







trained  in all aspects




Profits made from Y cube, type building projects could be ploughed back into building more houses, more  apprenticeships with training .With the remainder, helping veteran soldiers and good causes.

While the Y cube is an exemplary construction project, in order to cater, more tastes and slightly higher budgets of say GBP 80 -100 K [ still way below minimum price of a national house builder], the government could reboot the YTS scheme, to counter to the drop in apprenticeships and rise in youth unemployment post 2007 crisis.
The construction sector is a key sector for the UK economy and comprises a wide range of
products, services and technologies. These are likely to vary in terms of the economic
value they generate, reflecting differences in their use of particular factors of productions
(raw materials, physical capital, intangible investment, skilled and non-skilled labour and

knowledge) and the value which they generate from them




A 2014 Lyons Housing Review for the Labour Party claimed that we need to build 243,000 new homes a year.




City Hall’s website, details the locations of land owned by the Mayor of London, Government departments, London boroughs, Transport for London and the NHS. There are sites across every London borough, ranging from tiny parcels of land capable of sustaining the construction of a small number of homes to larger sites,

Which could accommodate hundreds of new homes for Londoners.



Modern factory-assembled units, which can be customised to match the appearance of surrounding areas, cost half as much to build compared with standard techniques yet match and often exceed building standards and safety regulations.

Although this type of housing has been around for decades, it has evolved dramatically since the era of the post-war ‘prefabricated’ homes, especially in recent years. Today’s designs are of exceptional quality, highly sustainable and meet or exceed the same rigorous standards as traditional housing. The design is flexible and can be altered complement any
housing style – from modern contemporary to classic traditional designs. Energy costs for
occupiers are typically very low, potentially saving several hundreds of pounds on energy
bills.

So why are the big national house builders not building then if they have been around for so long ? pure and simple their own profit margins ,point a greater angle due north.



Legal & General

One of the UK biggest insurance companies has invested around £50million in a factory which builds ‘flat pack’ houses, it has emerged [25/02/16].



FTSE 100 insurance giant Legal & General has hatched plans to build a giant factory near Leeds, which it hopes will churn out 3,000 pre-fabricated homes a year.




Automated Factory 

It has already bought a 500,000 square feet warehouse in Sherburn, just outside Leeds.
This is believed to be the biggest commercial property available to rent in the UK.


The ‘prefab’ homes will be completely built in an automated factory – including white goods and interiors - before being driven to their destination on the back of lorries.
The houses will be targeted at those on low to medium incomes and will cost in the ‘low hundreds of thousands’ of pounds’.

But it is also convinced there are big profits from stepping into the breach.

Already owns 57 per cent of Scottish housebuilder Cala, and it recently announced it was investing in 3,000 homes in the private rental sector with a Dutch pension fund.



Earlier this month it announced plans to build 1,000 houses in Crowthorne, Bracknell.




Europe Second World War

Prefab homes are far more common in continental Europe and Scandinavia.
Hundreds of thousands of them were built in the UK as an emergency measure introduced by Winston Churchill to address a major shortage after the Second World War.
They were only designed to last ten years but a number still survive



A new report by Andrew Boff, ‘Pop-up Housing: A London Solution’, shows that modern pop-up homes, which are often indistinguishable from standard homes, can take just a third of the time to construct and are already providing housing solutions in Amsterdam and across other parts of the UK.

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Further Reading