Saturday, July 12, 2008

Rule of thumb; 1 house = 1 job

Housing slump puts 250,000 jobs at risk

Roger Humber, strategic policy adviser to the House Builders Association, said: "We have always said one house equals one job, in that all the components - like the plumber doing half a day and the electrician - add up to one person per house. This year we have about 80,000 homes coming in rather than 180,000 last year, so that is 100,000 jobs lost. It is the crudest rule of thumb we can apply."

Posted by who stole my pension? @ 07:38 AM (1482 views)
Please complete the required fields.



23 thoughts on “Rule of thumb; 1 house = 1 job

  • 250,000? More like 59 million.

    Reply
    Please complete the required fields.



  • Only 250,000 jobs at risk? More like 59 million.

    Reply
    Please complete the required fields.



  • “the consequences of allowing the industry to shed jobs has long-term consequences”

    Amongst those consequences might include being able to get a plumber when you actually need one, or as I had 12 months ago when I needed a joiner for a mornings work who said that the work was going to cost £400 (to refit skirting boards in 3 rooms and hang 4 doors) as he could only fit me in on a friday (I live in a house near Bolton, not Buckingham f**king Palace).

    Does this mean that tradesmans charges might fall in line with house prices??

    Reply
    Please complete the required fields.



  • @ Martin,
    Yes, I think it does. Good news for you, but bad news for others; the lower charges for work mean the Joiner/plumber has less cash to spend on eating out, drinking at the pub and electric foot massage machines.

    Reply
    Please complete the required fields.



  • Martin, assuming you mean hang 4 new doors (i.e. hinges, locks and sizing to frame) and refit new skirting, that would be about 2.5 to 3 days work, so £400 is fairly reasonable.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    One house = one job

    That’s incredibly efficient. I would have thought one house = five jobs.

    Reply
    Please complete the required fields.



  • @ alan,
    And god it might get worse, they may even have to work ALL day on a friday, those poor people.

    @m.w.

    “like the plumber doing half a day and the electrician – add up to one person per house”

    hold on, both the plumber and the electrician are still gonna charge for a full days work anyway ………. unless its friday then he’ll have to charge for mondays work to come back and finish off (it is a friday after all and you cant expect them to come back after their extended pub lunch).

    Reply
    Please complete the required fields.



  • @alan
    It may even mean they have to work a full day EVEN on a friday, what will happen next is a further downturn in the pub industry as all those friday early finishes for extended lunches have to stop as these tradesmen return to realistic charges. Never mind the the electric foot massage machine, how will he be able to fuel the wifes weekend X5. Not only this but all the extra traffic on the road on a friday afternoon as these workers make their way home along with all the regular workers will no doubt clog our already congested roads with ensuing mayhem and massive polution problems as the old escort vans are put back into service. Damn you HPC for causing the end of civilisation. (Sorry, too much coffee this morning)

    @mark w
    “like the plumber doing half a day and the electrician – add up to one person per house”
    HA – when the plumber does the half a days work, he would no doubt charge for a full day anyway unless its a friday and – you guessed it – would have to charge more as he will have to come back on monday to finish the job (it is a friday afterall).

    Reply
    Please complete the required fields.



  • I think it was Cornishman or Shipbuilder discussing the other day on the German Plot of land discussion that the labour price of building a 4 bed detached was 1 skilled labour year and one unskilled labour year. So that would be 1 1/2 jobs per house so to speak in monetry terms or 2 jobs in actual terms (the labourer still needs to live somewhere and IMO has the right to a family home even if this is a 3 bed semi and the skilled worker (Chippy/Bricky/sparky/plasterer) lives in a 3/4 bed detatched.

    I expect a labourer to earn about £20k p/a which to me prices a 3 bed semi at about 100k (3x1st wage + 1x2nd wage + 20% deposit).
    I expect the skilled tradesman to earn about £40k pricing the 3/4 bed det at about 175k (3x1st wage + 1x20k 2nd wage + 20% deposit)

    Sorry to digress onto wages and predicted house prices, I’m thinking out loud and these figures look like about a 50% fall to me !

    Mark @ 8.50am – taking your comment, I think the skilled wowrker + labourer was based on 1 house or small development, so a larger estate should benefit to a degree from economies of scale. (Less missed days from trade cross overs etc.

    It is a big mistake for the country to have alot of unemployment in the building industry, this happened 1990 crash – the result was that when things started moving again there was a skills gap as we hadn’t been taking on young apprentices on for 8-10 years.

    The Polish etc came over to fill the gap, perhaps it will be Chinese farmers next time around.

    Reply
    Please complete the required fields.



  • @4
    My post was not intended to slight these good and errrrr “honest” workers who form the backbone of our country.

    Reply
    Please complete the required fields.



  • What the building industry is doing here is pulling on the political heart strings of government re jobs, and also looking for a big dose of public sympathy. What they are refusing to do is to mark down the land values of their holdings, ie they are basing everything on keeping the paper profits they have made on the value of land which of course they add onto the price of what they are selling. They are also trying to keep the large premiums they have made on each unit sold at the record prices for the last few years. These builders hold the key to their own demise or continuing success. If they write down the so called value of the land they own by say 80% and then drop their final building profits by say 20% we might all of a sudden have a massive market for new builds selling at half todays prices. These greedy pigs always see their profits as a ratchet up device with no mechanism for operating in different economic circumstances and will do anything to keep it that way and will devastate the industry out of pure spite rather than change their greedy ways. They have already had a free ride with all the imported cheap labour and reduced the opportunities for British workers enormously. Its about time the government started standing up for the workers and pointed out a few of these home truths to these scumbags and even forced them by various incentives (how about 90% taxes or confiscation of unused land?) to start building and selling at realistic prices. The fact is, that the longer they hold off, the more they will have to discount later, if indeed they still have a business. There is a massive block of flats near where I live that has sat idle ever since they put up the concrete structure 6 months ago, reason being, is that no one has bought off plan on account of the silly asking prices. The company involved bought the land around 7 years ago (you heard right, 7 years) for around 30% of todays price, but they determined to keep the peak prices. I say they will go broke waiting, the receiver will sell whats left out at a realistic price and in 5 years time these flats will sell at a profit to the new builder for less than half of todays price.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    STR2007, the cost of the bricks and mortar is not and never was an issue. As you guesstimate, the cost of building a house is in the region of £60k to £100k.

    So why have house prices trebled? The balancing figure is the land/location value. Residential land values have in fact gone up 500% since 1995. This applies to the cost of new land for building on just as much as the implied value (i.e. total cost minus rebuild cost).

    Ergo, it’s land values that should be kept down, to my mind by land value tax.

    Reply
    Please complete the required fields.



  • I still haven’t fully got my head aroung LVT yet, I’ll try and have a look over the weekend. I know it’s not popular with alot of people, but perhaps they just haven’t got their heads around it either.

    I know France is bigger than uk, but as a whole we seem to have very expensive land in this country. The obvious small island arguement comes up, but I think this is a bit of a red herring (we’ve only built on about a 1/10 of th uk.

    Do you know what system other countries operate to keep their land price down ?

    I suspect one that’s not hugely dissimilar to ours and that our high land prices are down to our own combination of property is best psychie, egged on by the television and capped off with loose lending criteria with a varied blend of greed and fear to close the deals.

    Reply
    Please complete the required fields.



  • Anybody know about pre-fab pros and cons? E.g. timber-frame kit houses, about £50k total cost for parts and assembly.

    Reply
    Please complete the required fields.



  • This is exactly that same as happened during during the recession around 1990. Builders were one of the first trades to get hit, especially those that were involved with new builds. It was the precursor leading into the recession.
    One of the differences is that Interest rates escalated up to around 14% but during the 90s the house price to earning ratio was not as excessive as today.

    Reply
    Please complete the required fields.



  • One man-year’s work is not a bad estimate for actually building the average home; but there are also a lot of hangers on – notably surveyors, architects, engineers, project managers, health ‘n’ safety parasites and planning consultants, who have all managed to increase their share of the action in recent years; not to mention the labour force who make the building materials, tools and equipment.

    That brings the number up to about 2.5. But that’s not the end of the chain – those 2.5 people not earning are consequently spending much less – so the guy doing all-day breakfasts and bacon rolls in the trailer across the road from the building site is also out of a job, for example.

    This propels the number of jobs lost to around 4. That’s four people claiming benefit and not paying tax, which leaves the govt with a little bit of a problem…!

    Reply
    Please complete the required fields.



  • Icarus

    Potten are a manufacturer of timber framed houses.

    Check out buildstore at Swindon where they have a Potten home built inside their warehouse. There are also various cross sections of building elements drains, roofs, etc. Not a bad day out if you’re interested in that kind of thing.

    Re: pros and cons. In a quiet housing market people may prefer a traditional built home (bricks and mortar) but this may be an old fashioned view of mine. The availability of finance is the crucial thing. As long as people can get a mortgage for a timber framed house that is as competative in interest rates and deposit requirements as other houses you shouldn’t have a problem.
    Also worth checking out that you don’t have to pay a premium for buildings insurance and that the building itself would carry all the usual 10 year NHBC guarantees. Also you don’t want a rotten house in 30 years time, but I’m sure that is all covered. But worth checking out.

    There is also a new breed of house which works around a steel frame construction. The shell goes up with roof on in a matter of a couple of weeks so very much quicker than a traditional build.

    That’s as much as I know on the subject so far.

    Good Luck let us know how you get on.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    STR2007, half the countries have had a property price boom. France and Germany are noteable exceptions – but it is partly a mentality thing, partly because they are far more generous with planning permission and finally because lending criteria are far stricter.

    Reply
    Please complete the required fields.



  • Oh no, another report saying houses are the most important thing in any economy. NER NER. Exports are important, a load of numpties swaning around selling houses to one another does not an economy make.

    Reply
    Please complete the required fields.



  • “a load of numpties swaning around selling houses to one another does not an economy make.”

    Good point symo. People have started believing all this clap-trap that our economy can’t survive a HPC. Everyone ramps up the dier consequences and forgets that we actually went through 2 world wars last century without the end of civilisation/money/debt as we know it.

    Reply
    Please complete the required fields.



  • So Mark

    Hyperthetically do we need Land Value Tax because of our mentality ?

    Or could we just relax planning slightly and tighten up lending criteria (which I think will happen to a degree anyway) and put a ban on BTL speculation.

    It seems to me that easy money is the main culprit.

    This combined with an artificial shortage.

    Only allowing over 18’s to own a house and limiting it to max 1 property per person or per tax payer or something seems to me to involve a lot less upheaval of a present system.

    This would free up an awful lot of housing and bring prices down to much more sensible levels.

    I guess alot of middle England wouldn’t want to give up their holiday cottages and BTL portfolios, but should they have the right to own what should be other peoples houses.

    It would be far better they put their spare cash to good use investing in British Companies that Design, Invent and Manufacture world class products than price everyone under the age of 35 out of a house.

    Reply
    Please complete the required fields.



  • str 2007 @17 – thanks for that. I’m not looking for a house at the moment but I thought it might be interesting to widen the discussion of building costs to the off-site-manufactured market.

    Reply
    Please complete the required fields.



  • Builders Cheltenham says:

    Rule of thumb; 1 house = 1 job?

    Is there a logic to this?

    “I thought it might be interesting to widen the discussion of building costs to the off-site-manufactured market.” – I agree with you.

    Builders Cheltenham

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>