Association could save £20,000 per home using own construction team
Landlord in self-build pilot
A Liverpool-based housing association could save up to £20,000 in construction costs per home by using its own in-house build team.
Plus Dane, which owns or manages 13,000 homes, will save money by training up its existing repairs and maintenance teams to build homes, bypassing costlier building contractors. The project, known as Ni Smartbuild, is due to launch next month.
Ken Perry, chief executive of Plus Dane, believes it can save money on contractors’ additional expenses, such as travel and administrative costs, and because they will not be turning a profit on the scheme.
‘We can cut out waste throughout the whole process,’ Mr Perry added.
Plus Dane will begin construction on its first three Ni Smartbuild properties on 31 May. If the pilot is successful, it will be expanded to include up to 200 of the housing association’s 1,000-home new build development programme until 2015, although the scheme will initially focus on small-scale developments. The success of the pilot will be judged on whether it makes the anticipated savings.
Savings are expected to be minimal in the early years but will rise as the project benefits from economies of scale, Mr Perry said.
A spokesperson for Plus Dane said: ‘The idea was to look to get build costs down to the £70,000 per unit mark, compared to what we’ve seen over the past few years of £100,000 plus.
‘Although we are achieving under £100,000 now on normal schemes because of the recession and builders desperate to keep cash flow, in five years’ time, we expect build costs to be rising quickly again, by which time we should be saving at least £20,000 on each build.’
Though several landlords have in-house repairs teams, few currently build their own homes. One exception is Gentoo, whose building arm Gentoo Construction also sells its services to other providers.