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Actual Cost Of Construction

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Guest มร หล&#3

We need to remember that houses cost money to build. Land price aside for a moment, we need to do a bit of research here about how much it costs the major builders to build a house, say 3 bed semi in a 200 house estate.

Then add land prices.

What think?

I reckon on around £40k + land. Probably less.

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We need to remember that houses cost money to build. Land price aside for a moment, we need to do a bit of research here about how much it costs the major builders to build a house, say 3 bed semi in a 200 house estate.

Then add land prices.

What think?

I reckon on around £40k + land. Probably less.

Wouldn't surprise me if the big builders could do it for 40K - 80 sq m timber frame semi?

Don't forget the cost of utilities connections, drainage, roads, streetlights, playparks, social housing etc - can add a few thousand to the cost of each house..

However, the profit can be low - a few percent - once all costs are considered.

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5 pints of sweat, a blood, and a double tears, from each man prepared/forced to get his hands dirty, at the mo.

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Guest มร หล&#3
5 pints of sweat, a blood, and a double tears, from each man prepared/forced to get his hands dirty, at the mo.

T1TS!

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We need to remember that houses cost money to build. Land price aside for a moment, we need to do a bit of research here about how much it costs the major builders to build a house, say 3 bed semi in a 200 house estate.

Then add land prices.

What think?

I reckon on around £40k + land. Probably less.

Really crap build is about £800 per square metre. This is below standard for the affordable/social housing sector. Typical two bed house might be 75 sq. m, so, £60,000.

Next year house builders have to build to Level 3 Code for Sustainable Homes and also meet Life Time Homes. Build costs will jump to £1200 per sq. m minimum, so, nearer, £90,000.

These costs may not include professional fees ( architects, planning, building regs etc) which can add 10 - 16%.

Most large building sites suffer from screw ups, damage, poor buying, theft, security costs, over runs, severe H & S requirements. All are difficult to cost.

The BBC ran an article last week stating that the affordable/social housing bodies are refusing to buy the unsold inventory of the speculative private sector. They stated it was because of poor standards. But the real reason is that they require Level 3 and from May 09, Level 4 Code for Sustainable Homes and none of the private builds even get on the radar. ie, the energy efficiency of the private builds is crap. Maybe these houses will be ok for private buyers but I doubt it and I'm certain the mortgage lenders will have taken note. They may as well demolish them and take them out of the system.

Life Time Homes is a requirement for new builds from May 2010. In brief, all new houses must be capable of adapting to the life time needs of the occupants. A lot of common sense stuff including making the stairs wide enough to accept a stair lift, door ways big enough for wheel chairs, down stairs loos big enough for disabled use. All of this will make houses bigger but lets face it, they are pretty tiny now. So, all builders big and small will need to re draw all their bog standard designs.

So, the builders are facing all of this in the grip of a massive deflation in selling prices.

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Guest มร หล&#3
Really crap build is about £800 per square metre. This is below standard for the affordable/social housing sector. Typical two bed house might be 75 sq. m, so, £60,000.

Next year house builders have to build to Level 3 Code for Sustainable Homes and also meet Life Time Homes. Build costs will jump to £1200 per sq. m minimum, so, nearer, £90,000.

These costs may not include professional fees ( architects, planning, building regs etc) which can add 10 - 16%.

Most large building sites suffer from screw ups, damage, poor buying, theft, security costs, over runs, severe H & S requirements. All are difficult to cost.

The BBC ran an article last week stating that the affordable/social housing bodies are refusing to buy the unsold inventory of the speculative private sector. They stated it was because of poor standards. But the real reason is that they require Level 3 and from May 09, Level 4 Code for Sustainable Homes and none of the private builds even get on the radar. ie, the energy efficiency of the private builds is crap. Maybe these houses will be ok for private buyers but I doubt it and I'm certain the mortgage lenders will have taken note. They may as well demolish them and take them out of the system.

Life Time Homes is a requirement for new builds from May 2010. In brief, all new houses must be capable of adapting to the life time needs of the occupants. A lot of common sense stuff including making the stairs wide enough to accept a stair lift, door ways big enough for wheel chairs, down stairs loos big enough for disabled use. All of this will make houses bigger but lets face it, they are pretty tiny now. So, all builders big and small will need to re draw all their bog standard designs.

So, the builders are facing all of this in the grip of a massive deflation in selling prices.

Harold,

Many thanks. Can't see many houses getting built now. I know the residential development driven end of my business is totally dead now in the UK (land regen).

I just finished my new build at £150 sq.m. But we're basically in the third world here, sort of . . .

It goes to show that these UK houses, however awful, ain't cheap to build now.

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Don't forget the cost of utilities connections, drainage, roads, streetlights, playparks, social housing etc - can add a few thousand to the cost of each house..

You are aware that generally play areas and green spaces usually show on plans but get covered with houses at the end of the project... often with the housing meant for social housing!

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Harold,

Many thanks. Can't see many houses getting built now. I know the residential development driven end of my business is totally dead now in the UK (land regen).

I just finished my new build at £150 sq.m. But we're basically in the third world here, sort of . . .

It goes to show that these UK houses, however awful, ain't cheap to build now.

Near where i live an entire eco friendly town was due to be built, and a £100 million concrete busway has been built to service it to the nearby city. Given the situation i think we have a huge white elephant until such a time as it becomes profitable to build this type of home. Or maybe it will be an entire town cum social housing project.

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The construction costs of housing over the next decade are going to increase to levels not previously seen, this will mainly be due to high imported general inflation driven by energy costs.

There are also stricter building regs on the horizon, energy efficiency measures will really bump up construction costs along with lower construction levels as fewer companies compete knocking up the prices per Sq metre.

To a certain extent this increase will be offset by cheaper land prices, but due to planning laws and the limited availability of prime land for development the prices will also remain relatively high and again as soon as the housing market recovers land will quite quickly increase in value.

At the peak of the boom it was costing a major player £75k to build a decent sized 4 bed detached property, self build around £120k.

As mentioned earlier the actual profits for these companies are further eroded when you factor in utilities, street lighting, roads, green areas, part exchange and other incentives.

Difficult to put a price on it but weighing up the above you could probably add £10-15k per property to cover these costs making a decent sized 4 bed detached on a 200 home estate approx £90k plus the cost of the land.

With the building standards of these companies going forward expected to be better than what we have been used to previously I cannot see construction being much less than £100k.

Does anyone else expect to see a housing problem similar to that of oil going forward, suppressed during the recession only to bounce back to new highs due to a number of years of under investment, (lack of building) and having now picked all the easy stuff (Development of land) now the more difficult stuff is going to cost more, I mean land that is harder to develop, difficult for utilities, more roads is all that is really left to develop and machinery used to develop this land will cost more to operate due to oil and other energy costs rocketing.

Will we be seeing the same level of polish builders? Will British builders expect better pay? less competition = better negotiating position.

It may seem a million miles away at the moment, but soon as we turn the corner things will quickly pick up.

And on top of all this, will there be funding there for these big developments? If we only get small developments then again per Sq Metre the price is going to be higher.

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The construction costs of housing over the next decade are going to increase to levels not previously seen, this will mainly be due to high imported general inflation driven by energy costs.

There are also stricter building regs on the horizon, energy efficiency measures will really bump up construction costs along with lower construction levels as fewer companies compete knocking up the prices per Sq metre.

To a certain extent this increase will be offset by cheaper land prices, but due to planning laws and the limited availability of prime land for development the prices will also remain relatively high and again as soon as the housing market recovers land will quite quickly increase in value.

At the peak of the boom it was costing a major player £75k to build a decent sized 4 bed detached property, self build around £120k.

As mentioned earlier the actual profits for these companies are further eroded when you factor in utilities, street lighting, roads, green areas, part exchange and other incentives.

Difficult to put a price on it but weighing up the above you could probably add £10-15k per property to cover these costs making a decent sized 4 bed detached on a 200 home estate approx £90k plus the cost of the land.

With the building standards of these companies going forward expected to be better than what we have been used to previously I cannot see construction being much less than £100k.

Does anyone else expect to see a housing problem similar to that of oil going forward, suppressed during the recession only to bounce back to new highs due to a number of years of under investment, (lack of building) and having now picked all the easy stuff (Development of land) now the more difficult stuff is going to cost more, I mean land that is harder to develop, difficult for utilities, more roads is all that is really left to develop and machinery used to develop this land will cost more to operate due to oil and other energy costs rocketing.

Will we be seeing the same level of polish builders? Will British builders expect better pay? less competition = better negotiating position.

It may seem a million miles away at the moment, but soon as we turn the corner things will quickly pick up.

And on top of all this, will there be funding there for these big developments? If we only get small developments then again per Sq Metre the price is going to be higher.

Not to forget a land development tax and higher contributions to councils for infastructure. The frightening prospect is that the taxpayer will have to pick up a vast proportion of costs to build social housing now the pack has collapsed.

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The construction costs of housing over the next decade are going to increase to levels not previously seen, this will mainly be due to high imported general inflation driven by energy costs.

What about the reduction in labor costs?

Cheaper laborers, plumbers, electricians etc.

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Guest มร หล&#3
Not to forget a land development tax and higher contributions to councils for infastructure. The frightening prospect is that the taxpayer will have to pick up a vast proportion of costs to build social housing now the pack has collapsed.

That's right John, add to that,

  • Contaminated Land remediation tax benefit pulled. Was 150% of the cost of remediation, now gone.

  • Landfill tax increase for muck away.

  • Landfill tax exemption for development sites pulled.

  • Govt still want 60% of new build on 'brownfield' land (not necessarily contaminated)

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What about the reduction in labor costs?

Cheaper laborers, plumbers, electricians etc.

Maybe for now while we arnt building much. But as inflation possibly increases there will be a lot of pressure for them to hike the rates.

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That's right John, add to that,
  • Contaminated Land remediation tax benefit pulled. Was 150% of the cost of remediation, now gone.

  • Landfill tax increase for muck away.

  • Landfill tax exemption for development sites pulled.

  • Govt still want 60% of new build on 'brownfield' land (not necessarily contaminated)

And it all adds up to the end of cheap house building costs. They said that about oil too.

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Guest มร หล&#3
The construction costs of housing over the next decade are going to increase to levels not previously seen, this will mainly be due to high imported general inflation driven by energy costs.

There are also stricter building regs on the horizon, energy efficiency measures will really bump up construction costs along with lower construction levels as fewer companies compete knocking up the prices per Sq metre.

To a certain extent this increase will be offset by cheaper land prices, but due to planning laws and the limited availability of prime land for development the prices will also remain relatively high and again as soon as the housing market recovers land will quite quickly increase in value.

At the peak of the boom it was costing a major player £75k to build a decent sized 4 bed detached property, self build around £120k.

As mentioned earlier the actual profits for these companies are further eroded when you factor in utilities, street lighting, roads, green areas, part exchange and other incentives.

Difficult to put a price on it but weighing up the above you could probably add £10-15k per property to cover these costs making a decent sized 4 bed detached on a 200 home estate approx £90k plus the cost of the land.

With the building standards of these companies going forward expected to be better than what we have been used to previously I cannot see construction being much less than £100k.

Does anyone else expect to see a housing problem similar to that of oil going forward, suppressed during the recession only to bounce back to new highs due to a number of years of under investment, (lack of building) and having now picked all the easy stuff (Development of land) now the more difficult stuff is going to cost more, I mean land that is harder to develop, difficult for utilities, more roads is all that is really left to develop and machinery used to develop this land will cost more to operate due to oil and other energy costs rocketing.

Will we be seeing the same level of polish builders? Will British builders expect better pay? less competition = better negotiating position.

It may seem a million miles away at the moment, but soon as we turn the corner things will quickly pick up.

And on top of all this, will there be funding there for these big developments? If we only get small developments then again per Sq Metre the price is going to be higher.

Yes.

HPC'ers need to get a grasp of how much these things cost to build.

The old chap was a builder. He said in a crash prices go to around 90% of the insurance rebuild value. In a boom peaking at around 250%.

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Guest มร หล&#3
If build costs are going to rise like this then the slice of the pie for the land cost is going to crumble.

Your not comparing apples with apples there, Mick.

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Whoa, hang on a second. Back at the turn of the century new builds cost a third of what they cost today. Builders were knocking out 2 bedders at £60K and making money. Why have houses suddenly become so expensive to build all of a sudden? Is it an increase in cost of labour or an increase in the cost of materials?

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Harold,

Many thanks. Can't see many houses getting built now. I know the residential development driven end of my business is totally dead now in the UK (land regen).

I just finished my new build at £150 sq.m. But we're basically in the third world here, sort of . . .

It goes to show that these UK houses, however awful, ain't cheap to build now.

Can you give us a breakdown of the cost.

Your cost is awfully cheap. But is it down to lower cost materials, lower labour rates, lesser specification kitchens, bathrooms.

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This is an interesting thread, so, thanks for starting it. I'm a civil engineer ( water not construction) and have seen how housing is built in the Middle East, Africa and the West Indies. I'm not surprised if the cost in the UK is significantly higher than elsewhere in the "third" world. I am now invested in a house manufacturing business in the UK but we only do "off site" build in a factory construction . This almost eliminates all "wet build" site work and allows us to easily meet all the latest eco regs that conventional builders cannot (without extreme pain/cost) do. The build is more like car manufacturing.

UK building costs will rise due to the environmental requirements and the cost of imported materials.

The value of second hand houses may be somewhat supported by the increasing cost of new houses .... but... land is still the major part of the value of a house, new or old, so, that support is limited. And it is the value of land that is crashing.

If energy prices rise significantly, then old ( and some new) houses will become no more than "development land" value as it will become viable to demolish them and start again. Of course, this applies to crappy, cold Britain....

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Guest มร หล&#3
Can you give us a breakdown of the cost.

Your cost is awfully cheap. But is it down to lower cost materials, lower labour rates, lesser specification kitchens, bathrooms.

50 kgs cement, best Tiger brand £1.70

Blocks, 9p each

Sand, delivered £5.80 cu.m

Gravel, delivered, £10 cu.m

Concrete rings, 1200x500, £2 each

1200 biscuit, not transport grade, £1.50

Floor tiles, £2.80 sq.m

Hard wood windows, triple set, unglazed, no furniture, £8

Exterior paint, top grade 100% Acrylic, 5 US gal, £20

Labour, unskilled £3/day

Labour, skilled £6/day

No planning permission required.

No consultants.

No bu!!sh!t needed.

No councils.

No rates.

No Section 106 agreements.

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