One of the biggest problems in society today is housing. I have little doubt that anyone reading this now has had experience of the negative side of housing, particularly social housing. How many of you know someone or indeed have been in the position personally to worry about paying the rent next month? Or would like to have enough space for each member of their family with proper rooms where everybody in the family can have quiet space when they need it or space for a dining table so that the family does not need to eat dinner on their laps? How many of you know someone who would like to not have to constantly be excluded just because they are a benefits recipient? How many of you know someone that lives in dread of the notice from the landlord to quit because their home is going to be sold out from underneath them? (I’m guessing that’s just about everyone here)
There are all kinds of statistics available to demonstrate the short comings of the residential property industry in the UK; everyone knows someone that has fallen foul of the private lettings sector or is waiting to be housed by their local authority. It is reported on gov.uk website that there are over 1 million entries on the housing register nationally. This is worrying considering that only 17.2% of the countries housing stock is available to local authorities. This shortage has led to the highest housing waiting lists ever experienced in the UK.
Hammersmith and Fulham council reports that their waiting list has many applicants that should expect to wait at least 10 years to be housed.
Since the introduction of new tax laws, the burden upon private landlords is now stretched to breaking point and this has caused many private landlords to withdraw their properties from the marketplace and sell up. This causes even greater strain upon an already grave crisis. The simple answer to this problem is to build more housing. Typically, this is a problem in itself. Suppose you already owned the land, the build cost would be minimum £100,000 for a reasonably well appointed family home. This is the principle reason why property developers tend to stay away from social housing and why the volume developers market their sites as having an allowance for affordable homes (well spotted; affordable to who?) or simply promise to build social housing elsewhere then never really get round to it.
The Mayor of London has attempted to address this with his vision for housing in the 21st Century; he wants quality homes buit for our London residents but he doesn’t really go on to explain in any great detail how these homes are going to be built, when they will be built or by whom so I guess we are back into he realms of political promises (and we all know what that means)
What I would like to do is to build as many homes as I possibly can and fill them with people from the Local Authority waiting lists. Historically, I have presented the Business Angel community with several development schemes for social housing and without any exception, the stumbling block has always been:-
“What is your exit plan?”
It seems to be an alien concept to investors that there is no exit plan. The plan is to hold the title to the properties in a not for profit housing association and rent them out to tenants. In addition, the plan is then to use the income from the housing association to build more homes and rent those out and then build more and rent those out. In short, it would seem that there is no funding available in the private or public sector to built social housing in any meaningful way because there is no fast buck at the end of the building.
The build cost is an issue that is just as big as the lack of funding. Building the odd house here and there will never be sufficient to satisfy demand. Construction needs to be on an epic scale and needs to be in all areas of need geographically. We need to be looking at developments with tens of properties or even bigger. Unless we do this, there will be no meaningful impact on the housing waiting lists so site size is important. And obviously, if it costs about £100,000 to build a house, its reasonable to assume that it will cost a million to build 10 houses, substantial investment is required for this path and I have decided that I will never find an investor to invest the sort of money required for traditional construction.
Of course, new build is only one option; there is a growing market now for repurposing old buildings such as office blocks into residences. This is by no means a failsafe method to address the housing issue. The aforementioned Mayor of London wants a 3 bedroom property to be a minimum 74 square metres so again, the initial cost of acquiring the building and having a couple of flats on each floor renders the exercise uneconomical or unattractive to property developers in London. It is fair to say though that in areas where there is no minimum floor size restrictions, this model does quite well and often it is the case that the London Boroughs will farm out to the provinces, people from their waiting lists to properties that are already way below the standard that is required in London.
Even if there was the available investment for these potential projects, the costs have to be covered from somewhere so who pays in the end? That’s right, the tenant. This is why rents have rocketed. Landlords will not pay out of their own pockets to build a home for you, they expect to get their money back so they put the rent up. This prices out of the market all f the families on low incomes, benefit recipients, essential services workers, etc. the private lettings industry is only available to those that can pay and landlords will insist that they do pay.
My idea is to provide real, quality living accommodation ONLY to families and individuals on a low income or benefits or those that require support or specialist accommodation (vulnerable adults, etc). Those that could never afford to pay their own rent on a home that is a suitable size for their needs in a safe environment without any of the ghetto reputations that homes like this generally attract. I would like to adopt the ideal that each development will create its own active tenants association and a behavioural charter based upon being good neighbours. You know, exactly like it was in the old days…
So, given the idea is a utopian state, we needed to get right back to basics to drag costs down to make a development opportunity a lot more viable and attractive to investors to at least have a fighting chance of getting a foot in the door. Traditional construction with bricks and mortar would never get anywhere even close to the figure that we need to get to. We set ourselves a build cost target of £50,000 per unit. This could be achieved with a repurposed building if the properties inside didn’t achieve the minimum size or we missed out a few details like windows or kitchens or rooms. So this option was immediately dismissed as being a non starter. It was necessary to look at alternative methods and construction techniques: why is it so expensive to build?
A mistake that developers often make is just taking into account the cost of actually building a project. Not many ever think of maintenance or ongoing costs. A long time ago, we started to adopt the whole life costs theory of construction. This is very simple to understand:
· If you make something, what is its life expectancy?
· How much will it cost to clean and maintain over its lifetime?
· How much will it cost to replace when it become unrepairable?
by looking at these methods, something else that became very important in the equation is how much a property will cost to heat and light?
Clearly, a new home will not stay nice if the residents cannot afford to heat it, light it and ensure that it is adequately ventilated so it is the best idea to remove these issues in the design stage.
The focus on insulation and heat recovery is very important as is the robustness of all of the fixtures and fittings to ensure that they will not need to be maintained quite as much as something a little more delicate. We also need to look at the very lowest energy consumption possible to ensure that running costs are affordable to even the smallest income. In order to achieve this, Passivhaus principles became very important to the final design: -
The five basic Passivhaus design principles are: -
- Employs continuous insulation throughout its entire envelope without any thermal bridging.
- The building envelope is extremely airtight, preventing infiltration of outside air and loss of conditioned air.
- Employs high-performance windows (double or triple-paned windows depending on climate and building type) and doors - solar gain is managed to exploit the sun's energy for heating purposes in the heating season and to minimize overheating during the cooling season.
- Uses some form of balanced heat- and moisture-recovery ventilation.
- Uses a minimal space conditioning system.
Minimal space heating equals lower running costs. Heat and light bills are just getting higher. It is fair to say that during the winter months, people sometimes have to choose between keeping warm and eating. This is called energy poverty and it is generally agreed that this is a situation generally associated with lower income families. The legendary quote when discussing Passivhaus boasts that it is possible to heat a Passivhaus building with a single candle because it is so well insulated the heat cannot escape.
It is widely known that property developers will build the bare minimum for their requirements to satisfy the building regulations. It is fairly obvious that only the bare minimum insulation will be provided so a home will lose heat just as quickly as it can generate it. Suppose we could create a building that is so well insulated that very little to no heat is lost during the winter and will gain no heat in the summer. This means that it will cost very little to control the climate inside a property. Passivhaus is the standard that buildings are constructed to all over mainland Europe. So far in the UK it is generally set aside for a more cost-effective method of construction that provides something that is visible such as walls, floors, a roof, granite worktops, fancy tiles and engineered wood flooring to name but a few more saleable items. So if there is a concentration mainly on high performance windows, doors, walls, floors and roof, clearly there is going to be lower running costs and this makes the property ultimately, a lot more desirable as a residence. A home.
So, we are now beginning to see a specification emerging from just the information here: our building envelope must be as close to impervious as is possible to any of the elements including heat and cold: -
Our building must be a minimum size and be a very high rating on energy performance. This affords us very little on our £50,000 per unit budget so we need to make a radical complete departure from traditional construction altogether.
There are many tens if not hundreds of thousands of surplus shipping containers available to buy at any one time around the world. The UK is not short of these shipping containers either, I can source right now, several thousand of them and they are very very cheap. Guaranteed weather tight and certified for cargo transport. If we put a few containers together that gives us a very good shell to start with.
The design of the first shipping containers will be to provide 3 double bedrooms, a kitchen, living/ dining room and a bathroom with a full bath suite with a shower. Windows and doors will be cut into the shell of the building giving as much natural light that would ever be required and as much access as necessary. Container homes can be stacked on top of each other as they are on a ship. The fabric of the containers is such that they afford a gap between floors which again can be insulated not just for heat loss but for sound transfer as well which allows the residents to have wooden floors should they wish to do so without causing a nuisance to the residents below. The interior of the containers will be insulated with closed cell high density insulation which is not just fire proof, if it is thick enough it will render the shell almost sound proof with the added bonus that it will never become damp and require removal; no degradation over its lifetime and completely safe. Once they are insulated and have their windows and doors cut out they can then be fitted out. This will consist of traditional construction with high performance internal cladding, stud partitioning, electrics and water services and everything else that will turn these containers into homes.
What is surprising is the head height that these containers afford; the containers we will be focussing upon are 9’6” tall ( over 2.9m) this gives us ample headroom to create a ceiling void for cabling and air handling ductwork. We will be installing an all electric combination boiler to radiators with instant, unlimited hot water which is again better than A rated for energy performance. As the shell is so well insulated, it is calculated that only a 13 KW boiler will be required for each home. Very cheap to run and unbelievably efficient. Of course all the usual energy efficiency measures will be provided for such as LED lighting, high performance windows and doors and very efficient draught sealing. Suffice to say, our ultimate aim is to create a perfectly sealed unit that will form the shell of an extremely high performance residence that will be offered to a family to turn into a home.
Fitting out of the shell will more closely mirror traditional construction. As we have slashed the cost of creating the shell, we can afford to enhance the fit out aspects somewhat. Our wet heating system is innovative. It is a full combination system that emulates a gas combination system but ran entirely on electricity and rated at roughly half the capability you might expect from a gas system because the shell is so well insulated only minimal heating is required to maintain the building at a constant temperature all year round. Constant hot water will also be enjoyed without the trouble of planning ahead to ensure there is enough hot water to fill the full size bath that will be installed. Obviously we will be fitting water saving toilets and enhanced showers to save as much water as possible. Our bedroom walls will be well insulated between the living spaces as well as the usual bathroom wall insulation which would normally be installed under the building regulations. As well as the focus upon energy efficiency, we will always remember that these spaces will be occupied by real families and it is important that they feel at home in our properties; a real standard of living that far exceeds that which the Mayor of London sets out in his London Plan.
But obviously, creating the home is just the start of the process. The site is very important as well. Families need infrastructure. They need facilities and they need other things to instill a sense of community. Our developments will be tailored towards this. We will endeavour to provide all of the local amenities that one would expect to find to create a social setting. Open spaces, places for kids to play, walk the dog, buy a pint of milk at 10pm for the breakfast the next day. Wherever possible we will ensure that convenience is just as important in the planning stages as the colour of the external cladding so that our developments lead the field in urban regeneration. A place to call home, a landmark that others can only aspire to.