Space standards and market pressure

Space standards and market pressure

Paul Morrell, Deputy Chair, CABE

Very nice – but is there room to swing a cat?

Comparison of design occupancies with Parker Morris recommendations

Source: Housing Association Standards, Davis Langdon for the DFoE, 1993

sq m GFA/person

Designoccupancy(persons)

Dwelling Characteristic HA Private Diff (%)

type        

Flats bedroom area (sq m) 13.00 15.00 15.40

  nr of bedrooms 1.31 1.54  

  average bedroom area 9.90 9.70 -2.00

  design occupancy 2.39 2.75  

  bedroom area per person 5.40 5.50 1.90

Terraced bedroom area (sq m) 20.00 19.00 -5.00

houses nr of bedrooms 2.03 2.37  

  average bedroom area 9.90 8.00 -19.20

  design occupancy 3.42 3.80  

  bedroom area per person 5.90 5.00 -15.30

Semi- bedroom area (sq m) 25.00 22.00 -12.00

detached nr of bedrooms 2.56 2.61  

houses average bedroom area 9.80 8.40 -15.30

  design occupancy 4.39 4.17  

  bedroom area per person 5.70 5.30 -7.00

1993 Study by Salford University for the Joseph Rowntree Foundation

• 60% of Housing Association homes built in 1992/3 were between 5 and 15% below Parker Morris standards (v 8% above)

• 4% were more than 25% below Parker Morris (v 1% above)

• 88% of all units were below Parker Morris

(v 79% in 1989/90 survey by National Federation of Housing Associations)

Source: New Homes in the 1990’s, Karn and Sheridan, for the Joseph Rowntree Foundation, 1994

quoted in Housing Space Standards, by HATC Ltd for the GLA, 2006

Source: Design Practice and Volume Production in Speculative Housebuilding.

Alan Hooper, Chris Nicol - 1999

Source: Unaffordable Housing - Fables and Myths, Evans & Hartwich, The Policy Exchange, 2005

Source: Unaffordable Housing - Fables and Myths, Evans & Hartwich, The Policy Exchange, 2005

• This marks a new era for housebuilding in Britain where sustainability, quality and space are considered together.

Trevor Beattie

• This will give us the scope to really give the functionality, usability and pleasure that design can bring.

Sunand Prasad

• This will allow more flexibility in design. More space will allow better architectural expression. Wayne Glaze, Hawkins Brown

The tension between quantity and quality

Ministers must ensure that moves to make new homes environmentally-friendly do not discourage development.

The Calcutt Review,

The tension between cost and value

The negative consequences of increased space standards

• Less habitable rooms per hectare• … so increased land take/cost = less capacity• More built area per habitable room• … so increased build cost (or lower quality)• … so higher sale prices ??

Volume housebuilder’s cost make-up

Sale Price 100 £178,000

Land 26.2 £46,636

Construction 51.7 £92,026

Admin/sales

9.2 £16,376

Op profit 12.9 £22,962

%

100 £175,500 (£173 psf)

19.1 £33,520*

48.0 £84,240 (£83 psf)

8.5 £14,918

24.4 £42,822

%

*£38,200 per plot for private legal completions

The negative consequences of increased space standards

• Less habitable rooms per hectare• …so increased land take/cost = less capacity• More built area per habitable room• …so increased build cost (or lower quality)• … so higher sale prices ??• More money spent on new houses = less new houses• …and less spent on existing houses (Decent Homes)

The negative consequences of increased space standards

• Less habitable rooms per hectare• …so increased land take/cost = less capacity• More built area per habitable room• …so increased build cost (or lower quality)• … so higher sale prices ??• More money spent on new houses = less new houses• …and less spent on existing houses (Decent Homes)• Higher energy costs (HIP impact?)• ..and all space-related costs (routine maintenance, rates

etc)• ..and burden on local infrastructure

The negative consequences of increased space standards

• Less habitable rooms per hectare• …so increased land take/cost = less capacity• More built area per habitable room• …so increased build cost (or lower quality)• … so higher sale prices ??• More money spent on new houses = less new houses• …and less spent on existing houses (Decent Homes)• Higher energy costs (HIP impact?)• ..and all space-related costs (routine maintenance, rates

etc)• ..and burden on local infrastructure• Less compact neighbourhoods

Market pressures re space standards

• Customer preference

Market pressures re space standards

• Customer preference

• Location, location , location

• Affordability

Market pressures re space standards

• Customer preference

• Location, location , location

• Affordability

Market pressures re space standards

• Customer preference

• Location, location , location

• Affordability

Source: Savills

Mortgage repayments as a percentage of household income

Long-term average2006

UK House Prices vs Construction costsNationwide and Davis Langdon data

0

50

100

150

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350

Q1 1996

Q3 1996

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Q3 2006

Period

Ind

ex (

1Q 1

996=

100)

UK Average House Selling Prices Tender Prices

Bovis strategies/trends• Aim for 100% strategically sourced land

• Rolling replacement of developed land

• Increased coverage in England and Wales and increased volumes

• Move towards smaller, more affordable homes

• More social and partnership housing

• Strong product development: innovation/continuous improvement through R&D

• Accelerating D&B through efficient construction

George Wimpey strategies/trends

• To have the lowest unit land cost of any major builder (more strategic land buying)

• To create the most value in the planning process

• To maximise value for every plot

• A range of products: from one-bed apartments to large detached houses

•To be the most efficient builder…at the lowest fit-for-purpose cost base ( including VE, RM)

•Customer satisfaction: delivering as advertised

We…aim to be the housebuilder of choice for our customers, our employees, our shareholders and for the communities in which we operate.

Broad;costleadership

Narrow (focus);differentiation

Broad;Differentiation

Narrow;costfocus

Strategic Target

NARROW

BROAD

PREMIUMPRICES

LOWCOST

Pricing

Competitive strategies

Stuck in the middle

•Land/Planning•Recognising opportunity•Acquisition•Consent

•Design/Construction•Density•Layout•Product•Related commercial opportunity•Procurement•Construction•Project Management•Speed to market

•Sales and marketing•Segmentation•Pricing•Sales costs•Sales speed

Value creation process

Show me the money!

Market pressures re space standards

• Customer preference

• Location, location , location

• Affordability

• Prices considered per bedroom (rather than per sq ft/m)

• Value

• …and value retention

Source: Design Practice and Volume Production in Speculative Housebuilding. Alan Hooper, Chris Nicol - 1999

The Way We Live (1946)

Where public sector housing has been designed to lower than Parker Morris standards…the tenants have responded by consistently expressing dissatisfaction.

Market pressures re space standards

• Customer preference• Location, location , location• Affordability • Prices considered per bedroom (rather

than per sq ft/m)• Value • …and value retention• The effect of Section 106 Agreements

47% affordable - or 11.8%?

Desiderata

• Standards that are evidence based

DATA

Looking for Data

Desiderata

• Standards that are evidence based

• … effective

• … economic to operate

• … checkable/enforceable

The Mouse Equivalent Unit

  Units

Mouse 1

Small Birds 2

Rat 4

Pigeon 4

Hamster 3

Guinea Pig 5

Chicken 10

Rabbit 16

Cat 32

Dog 50

Monkey 50

1 MEU = 0.125 sf

Desiderata

• Standards that are evidence based

• … effective

• … economic to operate

• … checkable/enforceable

• … flexible

• … but resistant to evasion