New Council houses

[big fat yorkshire pudding]

Found this quite baffling, in the new council budget they have proposed building 360 new council houses over ten years.  Didn't seem that many and would argue it should be more, but what got me was the cost - £100m.  I found this quite surprising and I'm not really sure how that can be seen as value for money? 

That works out at £278k per house.  I'm not a massive expert in housing, but there aren't tonnes of houses in Doncaster being built at that cost and many much, much cheaper which surely would suffice?  Which begs the question, why does it cost the council that much and shouldn't there be alternative ways to increase council housing stock?

[Sprotyrover]

Found this quite baffling, in the new council budget they have proposed building 360 new council houses over ten years.  Didn't seem that many and would argue it should be more, but what got me was the cost - £100m.  I found this quite surprising and I'm not really sure how that can be seen as value for money? 

That works out at £278k per house.  I'm not a massive expert in housing, but there aren't tonnes of houses in Doncaster being built at that cost and many much, much cheaper which surely would suffice?  Which begs the question, why does it cost the council that much and shouldn't there be alternative ways to increase council housing stock?

It's a Labour Council cooking the books again!

[drfchound]

I guess that some people will say that the cost per house includes buying the land or clearing land they already own, and design costs.
But all houses have to have that included in the costs too.
£278,0000 per house does sound very high.

[Ldr]

Groundwork, roads, utilities

[SydneyRover]

There is also an opportunity for Club Doncaster caterers to do the Pie and a Pint deal at the new Danum Gallery 

https://www.doncaster.gov.uk/News/wanted-local-catering-business-or-professional-to-work-in-landmark-doncaster-premises

[BillyStubbsTears]

You cannot compare the top-line cost of a council house to that of a privately built house, because the two business models are totally different.

I assume the £100m includes the financing and maintenance costs.

The council has to find the money to build the houses, and it doesn't recover this by selling the houses, as a private builder does. So the council has to finance the capital cost, which means either borrowing (and paying interest) or using reserves (and losing interest). Either way, that adds significantly to the total cost over a long period.

It's like if you buy a house for £150k with a mortgage. It costs you a hell of a lot more than £150k to buy it. Private builders don't have that long term financing cost, because they aim to sell the houses as soon as they build them. The long-term financing cost then sits with the owner - as it does with the council in the case of council houses.

And then there's the ongoing maintenance/repair costs for which councils are responsible.

And you're ignore the income which the council will recoup from rents.

But I'm sure Sproty has seen summat on RT that says it's all a corrupt fix.

[drfchound]

Groundwork, roads, utilities

Groundworks, all houses.
Utilities, all houses.
Roads, well they are only building ten a year so it depends where they are built.
They might be at the side of an existing road.

[selby]

  Has anyone considered if that includes the brown envelopes or not?

[big fat yorkshire pudding]

You cannot compare the top-line cost of a council house to that of a privately built house, because the two business models are totally different.

I assume the £100m includes the financing and maintenance costs.

The council has to find the money to build the houses, and it doesn't recover this by selling the houses, as a private builder does. So the council has to finance the capital cost, which means either borrowing (and paying interest) or using reserves (and losing interest). Either way, that adds significantly to the total cost over a long period.

It's like if you buy a house for £150k with a mortgage. It costs you a hell of a lot more than £150k to buy it. Private builders don't have that long term financing cost, because they aim to sell the houses as soon as they build them. The long-term financing cost then sits with the owner - as it does with the council in the case of council houses.

And then there's the ongoing maintenance/repair costs for which councils are responsible.

And you're ignore the income which the council will recoup from rents.

But I'm sure Sproty has seen summat on RT that says it's all a corrupt fix.

Sorry BST, but the numbers don't really add up for me, seems far too excessive.  Surely given this aswell there's a genuine question why the council is not looking to outsource the build and either buying the properties or entering partnership as a housing associtation would? 

That much per house is crazy financing costs or not and asset backed lending to a LA isn't that excessive in fees.  Not to mention your point on rental income which should fairly easily cover the financing costs.

[albie]

Why would outsourcing provision reduce overall costs, without other changes to the development process?

There is no evidence that cost reduction at a comparable quality would be achieved, unless you also reform the build process at the same time.

Local Councils will always contract services from specialists under tender arrangements.

Direct public provision was the model when social housing was provided in significant numbers as a part of post war reconstruction. The numbers of units delivered was much higher than in recent years:
https://pbs.twimg.com/media/EP4X-_5U4AEGWWG?format=jpg&name=small

The cost of land acquisition and utility connections will be much the same across all schemes.

The greatest potential for savings comes in the construction method.
It is more cost effective to manufacture residential units in factories, and then assemble the modular sections on site.

The old building methods are being replaced by new working practices, minimising waste and improving scheme delivery schedules.

[Axholme Lion]

Why would outsourcing provision reduce overall costs, without other changes to the development process?

There is no evidence that cost reduction at a comparable quality would be achieved, unless you also reform the build process at the same time.

Local Councils will always contract services from specialists under tender arrangements.

Direct public provision was the model when social housing was provided in significant numbers as a part of post war reconstruction. The numbers of units delivered was much higher than in recent years:
https://pbs.twimg.com/media/EP4X-_5U4AEGWWG?format=jpg&name=small

The cost of land acquisition and utility connections will be much the same across all schemes.

The greatest potential for savings comes in the construction method.
It is more cost effective to manufacture residential units in factories, and then assemble the modular sections on site.

The old building methods are being replaced by new working practices, minimising waste and improving scheme delivery schedules.

But how long will they last? I struggle to see the buildings being built today still standing in 100 years time. I'm not being negative but every single tradesman I have ever spoken to has always warned me never to buy a new house.

[BillyStubbsTears]

BFYP

I'm no accountant but I'd assuming rental income would be on the Income side of the accounts?

[Axholme Lion]

BFYP

I'm no accountant but I'd assuming rental income would be on the Income side of the accounts?

I would imagine if you qualify for a council house nowadays you would get housing benefit, so who's paying the rent?

[albie]

AL,

How long they last depends on the design spec and the quality control.

That's why modular construction scores over traditional building, because units have to pass QC before leaving the factory. The difficulty with many new builds is lack of QC over the on-site trades, leading to problems after a few years.

Remove the construction problem to an industrial unit, then the remaining issues are site preparation, and installation and assembly. Much simpler.

This method is being used by some Councils across the UK. It started from providing emergency accommodation using containers, then moved into the area of bespoke design.

The traditional building industry is being disrupted by new technology....just like the car industry!

[Axholme Lion]

AL,

How long they last depends on the design spec and the quality control.

That's why modular construction scores over traditional building, because units have to pass QC before leaving the factory. The difficulty with many new builds is lack of QC over the on-site trades, leading to problems after a few years.

Remove the construction problem to an industrial unit, then the remaining issues are site preparation, and installation and assembly. Much simpler.

This method is being used by some Councils across the UK. It started from providing emergency accommodation using containers, then moved into the area of bespoke design.

The traditional building industry is being disrupted by new technology....just like the car industry!

 I may be over simplifying things here, but the units you are referring to, are they a 'fancy' portacabin type of thing?
I remember prefabs from the war still standing when I was a young 'un.

[Sprotyrover]

There is definitely a bit of Brown enveloping going off here. Doncaster Borough owns a heck of a lot of land. They have obviously written off the possibility of revenue from rent. 1 would have expected Donny Council to Knock up a Semi for £300k...then again it’s taken over 6 months to put a road and Pavement into that new street at Edlington.

[drfchound]

There is definitely a bit of Brown enveloping going off here. Doncaster Borough owns a heck of a lot of land. They have obviously written off the possibility of revenue from rent. 1 would have expected Donny Council to Knock up a Semi for £300k...then again it’s taken over 6 months to put a road and Pavement into that new street at Edlington.

£300k for a semi?

[Axholme Lion]

Donny Council seem obsessed with building or tarmacking over as much greenery as possible.

[albie]

Lion,

Here is an overview:
https://www.theguardian.com/society/2018/nov/30/uk-housebuilding-revolution-65000-prefab-homes-go-into-production

Lots of companies moving into this way of working.

The price per unit given here contrasts with the figure Donny Council give in the OP  from BFYP.

[Sprotyrover]

There is definitely a bit of Brown enveloping going off here. Doncaster Borough owns a heck of a lot of land. They have obviously written off the possibility of revenue from rent. 1 would have expected Donny Council to Knock up a Semi for £300k...then again it’s taken over 6 months to put a road and Pavement into that new street at Edlington.

Sorry two thREE bedroom houses joined together.



£300k for a semi?

[Sprotyrover]

Lion,

Here is an overview:
https://www.theguardian.com/society/2018/nov/30/uk-housebuilding-revolution-65000-prefab-homes-go-into-production

Lots of companies moving into this way of working.

The price per unit given here contrasts with the figure Donny Council give in the OP  from BFYP.

Looking at that article  I bet an allin price of £150k is well achievable on land owned by the council.

[auckleyflyer]

Why isn't the council buying up sub standard private property that can be bought up to required standard for far less than a new build. Won't harm the 1st time buyer market as these properties sit on the market for an age. 1st timers often blow budget on the purchase, therefore don't take on refurbs in general? Put a 1yr on the market limit for example?

[drfchound]

Also, when they demolish old houses etc why don't they clear the site and re build on the same land.

[turnbull for england]

Why isn't the council buying up sub standard private property that can be bought up to required standard for far less than a new build. Won't harm the 1st time buyer market as these properties sit on the market for an age. 1st timers often blow budget on the purchase, therefore don't take on refurbs in general? Put a 1yr on the market limit for example?

 It's dearer than you think to get houses up to standard of a council house new build. There's a lot under the skin on design like future adaption  room sizes, turning circles parking, storage etc. A 1920 terrace has access issues, no parking  adaptation isn't easy or practical before ypu start looking at energy efficiency. Also if the estate isn't dmbc stock there can be issues between residents on both sides

[Muttley]

Also, when they demolish old houses etc why don't they clear the site and re build on the same land.

What? Just like they’ve done recently in Hyde Park and Wheatley?

[drfchound]

Also, when they demolish old houses etc why don't they clear the site and re build on the same land.

What? Just like they’ve done recently in Hyde Park and Wheatley?

Have they, I don't go there.

They haven't in some places though.

[Muttley]

Found this quite baffling, in the new council budget they have proposed building 360 new council houses over ten years.  Didn't seem that many and would argue it should be more, but what got me was the cost - £100m.  I found this quite surprising and I'm not really sure how that can be seen as value for money? 

That works out at £278k per house.  I'm not a massive expert in housing, but there aren't tonnes of houses in Doncaster being built at that cost and many much, much cheaper which surely would suffice?  Which begs the question, why does it cost the council that much and shouldn't there be alternative ways to increase council housing stock?

The actual budget proposal (rather than the summary) refers to 560 houses not 360, so maybe a typo.

https://doncaster.moderngov.co.uk/documents/s25091/Capital%20Strategy%20and%20Capital%20Programme%202020-21%20to%202023-24%20Rep.pdf

[big fat yorkshire pudding]

BFYP

I'm no accountant but I'd assuming rental income would be on the Income side of the accounts?

Calculated very differently in a proposal such as this you would build it bringing the two aspects together.  However, it is typical for the public sector to work a bit differently and split via capital and income streams.

560 would be more sensible.Muttley, it definitely said 360 on their website.

On modular builds, some prototypes were built right next to my former house, quite impressive watching them go in, but they didnt look quite as strong in build.

[turnbull for england]

Also, when they demolish old houses etc why don't they clear the site and re build on the same land.

What? Just like they’ve done recently in Hyde Park and Wheatley?

l
The new houses in place of the Howard's in Wheatley won design awards too

[drfchound]

Also, when they demolish old houses etc why don't they clear the site and re build on the same land.

What? Just like they’ve done recently in Hyde Park and Wheatley?

l
The new houses in place of the Howard's in Wheatley won design awards too

Brilliant, that is what should be happening.