Home, cheap home

There’s that old Gershwin classic that applauds well-known pioneers. You know the one... “They all laughed at Christopher Columbus, when he said the world was round...” It makes a good point: when you’re an innovator, people often write off your ideas - like Edison’s recording of sound - as crazy.

That’s how the industry reacted to John Prescott when he challenged them to build a £60,000 home. Many said that it simply couldn’t be done.

Well, just as the Wright brothers were vilified for suggesting a man could fly, a determined Prescott pressed on with the idea. And as the song goes: “Who’s got the last laugh now?”

On April Fools’ day, a competition was launched to find housebuilders that could fulfil Prescott’s vision. Winners would help build 1000 homes across ten sites – with just under a third of units being built for £60,000. Homes have to be at least 76.5 sq m, sustainable and, although no type of construction is ruled out, applicants have to demonstrate that their homes can be reproduced on the sites available.

So is it really possible? The short answer is yes. Housebuilders like Redrow have already shown you can build and sell a home for even less. Its one-bed steel-framed flats in Rugby were snapped up for £55,000 in spring, and Wates has plans for a £60,000 home in Coventry.

In terms of the competition, the £60,000 target is achievable largely due to some sneaky moves by Prescott’s office. In an attempt to keep costs down, it removed obstacles that normally push prices up. For example, land costs are excluded and entrants do not have to budget for other external infrastructure like roads, parking and gardens.

The government’s efforts to drive down prices extends to the supply chain. Speaking at the Offsite 2005 conference in Watford last month, Prescott told delegates a way had to be found to lower plant and material costs.

The Deputy PM said 80% of housebuilding costs were not linked to materials. He warned that this is unacceptable and supply chains need to be sorted out. Tough words, but he stopped short on saying how this could be achieved. This is a huge area, and, if properly addressed, could see a lot more houses being built cheaper. Labour costs in particular, says Larry Greenwell, director at Turner & Townsend, are a major cost risk - especially when building on smaller infill schemes, as they are liable to fluctuate within a short space of time.

IS IT REALLY POSSIBLE? Well, YEs. Redrow has shown you can build and sell a home for even less than £60k

In terms of the competition, entrants will need to demonstrate a good supply chain for materials and a head for figures. Metek UK Limited, an off-site steel manufacturer, already has partnerships with some of the industry giants like Hanson, as well as strategic alliances with major construction suppliers like Lafarge and rendering company Weber.

Buy in bulk

Metek’s managing director Dr Alan Rogan says good supply chains are crucial if house prices are to be driven down He says if you talk to companies like Barratt, you’ll find it doesn’t just buy one door. It buys 15,000. “They have the buying power and put long supply chains in, so the person supplying the doors has a few years work and gets costs down.”

Metek has already proved it can build a light steel-framed house for just over £60,000 with foundations (see illustration, above left). The house itself was on show at Offsite 2005. The advantages of this two-bed home (see main picture) is the speed of construction. It took just six and a half hours to be erected. Materials are flexible and strong – steel can last for a 1000 years - and coverings can be varied. Think render, brick slip or cedar cladding.

The company is part of a consortia that has been shortlisted with 32 others for the next round of the competition. All have just over a month to set out in more specific detail how they might build a cut-price home to cost and quality specs for one of the earmarked sites. Rogan’s team contains housing associations and architects and they are confident that they can mass-produce homes for £60,000 a pop.

But not everyone is finding it so easy. Some have found the tight deadlines set by the competition as unrealistic and, according to one source, this results in the homes being “nowhere as good as they could have been”.

But, English Partnerships (which is running the competition for the ODPM), say the initial results have shown the industry’s willingness for high quality and innovative design. And with preferred bidders to be announced later this year, it’s just a matter of time before we discover if Prescott’s vision of low cost housing really is the work of a genius or just plain crazy.