Easy street

When deputy prime minister John Prescott announced at Labour’s party conference last September that he was challenging the construction industry to build homes for £60,000, he forgot to mention one thing: it happens already. The rules underlying English Partnerships’ “design for manufacture” competition – the vehicle for Prescott’s vision – are so relaxed that housebuilders are following them without knowing it on almost every large site in the country, even in London and the South-east.

For a start, Prescott’s scheme contains some glaring omissions. Land costs are excluded, and so is infrastructure such as roads and sewers. As Joe Martin, director of the Building Costs Information Service, points out, these elements often make up about two-thirds of the per-unit costs of most residential developments. Strip these out from current build costs and you can beat the £60,000 target every time. The latest figures from the BCIS show that the average 75 m2 home costs £53,721 to build (see elements cost box, right). Even if you include infrastructure costs, homes on infill sites have an average per unit cost of £72,000. So what’s the point of the competition?

The government insists that the competition will reap lasting benefits. The idea is that if builders turn out top-quality competition entries, they will have no excuses not to continue providing these well-designed homes, with EcoHomes ratings of “very good”, on every scheme they do. To a certain extent, Martin agrees: “Building a home for £60,000 is, within these parameters, very easy. It gets done every day. What is going to be interesting is just what people produce for the £60k – that is the exciting bit. The other thing is that these designs have to be able to be built again elsewhere.”

Robin Brodiecooper, partner at consultant Gleeds, agrees that the emphasis on raising standards of design is laudable. However, he sounds a cautionary note: “The competition is very important, but the key is to make the houses sustainable. For me the test is understanding what comes in a £60k home and whether it will stand the test of time. It is quite an investment for someone and you don’t want them falling apart 15 years down the line. This is a danger if people don’t use robust materials in order to hit the £60k target. Poorly prepared external timber, for example, will be rotten in 15 years’ time and have to be replaced. But it can be done. There may be a maintenance regime that occupants need to undertake to keep the house at a certain standard.”

Brodiecooper also feels that if architects are clever they will be able to deal with another perennial concern for housebuilders: nimbys. “Architects need to be careful in the design stage and head off nimbyism. But I think they can do it. The last thing we want is row upon row of £60k houses all looking the same if people do this into the future.

If it helps young people get a foot on the property ladder then good, but they don’t all want to be on the same-looking rung at the same time.”

So just what will architects and housebuilders produce for EP’s competition, the shortlist for which was due to be published as QS News went to press? Barry Munday, chairman of architect PRP, which is working on proposals for the competition with housebuilder Persimmon and steel-frame company Fusion, says: “Things we will be looking at if we win are better environmental standards, higher quality finishes and more adventurous exterior materials. There will always be a brick option but perhaps we could use render and timber finishes too … Hitting sustainability and higher environmental targets while staying within budget will be where some of the biggest cost pressures will be. English Partnerships is trying to get higher standards for lower costs and we will give doing this our best shot.”

The shortlist of 33 successful bidders, from the 50 who expressed an interest when the initial bidding closed on 13 May, is due to be published any day now, so details of precisely what can be built for £60,000 will soon be readily available. But what about the longer-term government aim of encouraging the industry to replicate its successes in the competition on open market sites? The BCIS’s Martin says: “The £60,000 house is a good initiative as it makes people look at the issues of supply and quality. However, if you reduce the build cost, that will allow developers to pay more for land, hence pushing up prices. This is a far from desirable outcome.”

PRP’s Munday agrees: “There are concerns among some architects that the programme is a bit of a waste of time … if you get a purely open market site the housebuilder is still more likely to take the extra profit that comes from building a home more cheaply or plough it into securing more land. But if [in future] homes are built on government-owned sites then they are much more likely to happen.”

Perhaps given last week’s confirmation from the ODPM and the Treasury that English Partnerships has bought 100 surplus sites from the NHS, and that the government was examining a further 700 public sector sites for possible use for housebuilding, there will be many more sites where the £60,000 house will become a regular feature. However, given that housebuilders prefer to build profits than beautifully designed homes, Prescott’s challenge does ring rather hollow.