Home truths


Is it better to build basic homes with potential than expensive finished products the market can’t afford? Savills director Tom Mann calls for architects to challenge existing models of delivery and design

Everyone – whatever their needs, age, ethnicity, mobility or religion – should have a fundamental right to a decent place to live: four walls and a roof over their head. If only it were that simple.

Affordability is a major issue in the private sector. High prices – the average London house-price is £618,000 – mean costs eat up an increasing amount of a buyer’s household income, in many cases well beyond 30 per cent.

The market is being propped up by Help to Buy, the government scheme which helps first-time house buyers acquire a new-build property with a deposit of just 5 per cent. Good in theory; problematic on the ground. Back in September 2018, The Times reported that ‘taxpayer cash pouring into the housing market under the government’s Help to Buy scheme is creating a bubble that risks leaving a generation of homeowners stuck in negative equity’. It’s easy to get into debt when the money seems ‘free’ at the time. What makes this all the more alarming is recent data, such as that produced by residential development research specialists Molior London following a series of FOI requests, which shows that in 2018, Help to Buy accounted for around 30 per cent of outer London transactions, 15 per cent of sales in inner London and 25 per cent of London’s house purchases overall.

By fuelling prices, it is putting further upward pressure on the price of residential land which, in turn, makes homes more expensive to buy. Little wonder there is an affordability crisis that is going nowhere fast.
Thomas Mann is a director at
Savills London office

Home truths

Help to Buy will be wound up in 2023. So what happens when the debt bonanza comes to an end? I won’t be sad to see the end of it. For all its good intentions, it hasn’t solved the housing crisis. A 2017 Morgan Stanley report found that builders charge an extra five per cent for properties sold through the Help to Buy scheme: there’s little incentive for a development team to revisit what they’re doing if they can find a ready market at an inflated price.

By artificially bolstering the market we are stifling much-needed innovation and creativity, and with prices being pushed up we aren’t meeting the demand where we need it. Surely it’s better to make housing that is truly affordable, at a loan-to-value ratio that doesn’t store up trouble for later? We just need to
work out how.

We hear a lot of talk about modern methods of construction, but all we see is modern methods being used to deliver the same problematic builds, albeit at an accelerated rate. Or new, overcomplicated systems that present a raft of new complexities and risks. There are thousands of patents pending for proprietary systems, all doing different things. How can a builder or developer commit to such systems though, if none are designed to work with each other? What happens if you commit to a system where the supplier goes bust halfway through construction? This is a risk that is killing the opportunity before it has had a chance to get going.

Perhaps we should look to the second-hand home market for inspiration. This market offers all kinds of opportunities to buy space within your budget; to invest in something because you see potential, or because it’s all you can afford right now. There is plenty of time to realise that potential – and hence improve its value – as and when funds allow. It’s a model that rewards tenacity and ingenuity, and which encourages people to adapt – rather than to renew – their homes as their circumstances change. As well as creating stability and established communities, this helps to improve the quality of the public realm. People who invest in their homes have an added incentive to look after their neighbourhood.

In the new-build sector, the opposite applies. The developer has already ‘unlocked’ all the value. Every inch of developable space has been accounted for, leaving no room for extension. Every corner of the home is fully finished. It might not be to your taste, but you’ve paid for it in the purchase price. From a financial point of view, it’s hard to justify a decision to make any change at all. If and when you want, or need, a different kind of home, your best bet is to sell up and move; a decision which can be costly, disruptive and – once you factor in the cost of stamp duty in London – not as cost efficient as it seems. Bear in mind, too, that developers are obliged to deliver affordable housing, pushing market prices up. I’m not against affordable housing. Far from it. We just need to figure out how to make more housing actually affordable.

Home truths

So what can the new-build sector learn from the second-hand market? Can we sell, say, a basic shell and core with the bare minimum of finishes and fittings on the basis that buyers can improve the spec as funds allow? Can we use the considerable design expertise we have in this country to design new-build housing which is genuinely affordable; which offers the best possible potential for the lowest possible cost? Can developers make good
margins by doing less but more? 

At the moment, the focus is on metrics and compliance with guidelines. We seem to have forgotten that housing should be designed and built by people and that people, by their very nature, are creative, entrepreneurial, highly individual – and in a constant state of flux. Income fluctuates. Lifestyles change. Families grow or merge or splinter. Relationships form and fall apart. Real people want homes that can adapt and grow. Homes with quirks and character. Homes they really can afford but then add to – and add value to – when they have spare cash.

Sustainability must be taken into account too. By that I don’t mean simply meeting regulatory codes. A simple, flexible, well-designed building should not be single purpose but must be adaptable, durable and built to last, to change. Buyers are waking up to the perils of poorly delivered housing and won’t stand for it. Their collective buying power puts them in charge.

What’s needed is a different offer altogether: new ways of delivering homes people want – and can afford – quickly and at volume. We need designers, architects and contractors to work to a common goal, language and system. Housing needs to be designed to be easy, and I mean really easy, to build. A team of builders on a site will have to put it together. Make it too complicated or frustrating and corners will be cut. This calls for ingenuity, creativity and a willingness to rethink how and what we build. Which comes down to good, inspiring design. Luckily this country has an incredible heritage of just that.

The industry can’t find this panacea on its own. Policy-makers need to provide the right stimulation and to encourage and reward innovation. For architects though, this is a time of opportunity. The role of ‘Chief Builder’ has been diluted to the industry’s detriment. It’s time the architect reclaimed the centre stage, taking charge of both design and delivery. We need a singular focus, not a compromise born from too many competing visions. Let’s hope the profession is up for the fight.