Build Quality vs Asset Management Costs – Time To Redo The Maths

Thursday, July 1, 2021

Historically, social housing providers have had to balance the capital cost of building quality against asset management costs. In simple terms, investing in higher quality work and materials would be paid back through lower repair and maintenance costs throughout the lifetime of the building. Alternatively, money saved in construction would generate higher costs later in the life cycle.

The cost/benefit analysis was often finely balanced and not an easy one to make. It is also one that trades known short-term costs with future ones that are much harder to quantify. At a time when the UK is looking to rapidly expand the supply of new social homes, there could be a temptation to prioritise speed over quality and lower construction costs over asset management charges.

The question is whether or not that equation still applies: does reduced asset management cost have to mean more capital investment up-front?

Offsite Upsets the Maths

The arrival of offsite construction and Design for Manufacture and Assembly fundamentally changes the maths. Offsite offers far greater assurance over both product quality and cost.

Building homes from components that are precision made in a manufacturing facility ensures that walls, doors and windows have a precise fit. Performance and quality are in-built rather than being the product of the skill level of people performing the work on site.

One factor that can’t be overlooked is the potential effects of the growing shortage of skilled construction workers. This will inevitably increase traditional construction costs and any future repair and maintenance activities that need those skills.

Product standardisation and repeatable processes make the costs of offsite methods comparable with traditional approaches. At the same time, quality control is enhanced, as is the assurance that new homes can be built to a standard of thermal insulation compatible with net carbon zero performance without expensive retrofit technology.

Osborne has experience of social and mixed tenure housing development using modern methods of construction. Our unique Systemised Housing product produces high-quality homes among with the lowest development cost per m².