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Corporate blog

WE BUILD HOMES NOT CARS - BY MICHAEL HILL

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01/07/2014

 

I attended a seminar on improving efficiency and delivery in housing at the CIH conference in Manchester last week. For a conference that started at 9.30am and which followed a very late dinner, my spirits were actually pleasantly high. However, they soon sank very quickly. The reason? Analogies were being made between the UK house building industry and the worldwide car manufacturing industry. Oh dear!

We build homes not cars - by Michael Hill

Let’s be quite clear. In 2013, the VW Group produced 10.2 million cars worldwide out of 27 plants. They were based on seven basic platforms, around which were clad different bodies for VW’s various subsidiaries, such as Skoda, Audi and Seat. Further customer choice variations then flow from that, none of which are of any substance. So let’s say that each basic platform comprises around 1,500,000 units per year. Typically VW Group spends around  £7 billion on R&D annually.

Compare and contrast that with UK house building: circa 130,000 new homes were built last year.   They were commissioned by a huge variety of clients, ranging from PRS investors to Local Authorities to Housing Associations and developers. The products ranged from 40-storey tower blocks to one-off mansions; from affordable housing to Private Rented Sector; from housing for families to extra care; and on sites that ranged from John O’Groats to Land’s End and from flat greenfield to vertiginous brownfield sites.

Let’s be generous and say it is possible to have some sort of volume comparison (although you’d need some sort of Stalinist command and control of UK house building to make it). At the very best, the number of basic platforms could easily be a 100 giving a production run of just 1,300 per year which does fall rather short of the VW Group’s 1.5 million units per platform per year, and of course the reality of UK house building is that it is carried out by a huge variety of producers. So there is simply no comparison and it is idle to pretend there is one.

Let’s therefore concentrate on addressing the specific circumstances of UK house building.  It is a relatively small-scale industry, where for the most part, land supply and regulatory constraints are the key barriers to improving efficiency and delivery.

Michael Hill, New Business Director


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About this blog

Here you’ll find property related blog articles from the team at Countryside as well as independent experts. Expect regular tips and advice on topics such as buying a new home, interior and landscape design, setting up home, mortgages and finance, plus articles on architecture, the property market, regeneration and more.

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