FAQs
Questions
Purpose
Q1: What is the purpose of the competition, why do you need to do this?
Q2: So the competition is not just for building £60k homes?
Q3: Is English Partnerships favouring MMC over traditional methods of construction?
Q4: Can you really build a quality home for £60,000?
Q5: Will English Partnerships sell the sites to the winners?
Q6: What will the mix of houses be?
Scale and finances
Who will be eligible for the homes / what is the cost
Q8: Where did this figure of £60k come from, on what is it based?
Q9: You say that 30 per cent of the competition homes will be reserved for people under the First-Time Buyers' Initiative. But will this 30 per cent actually be £60k properties?
Q10: What will be the sale cost of the homes if the build price is £60k? Surely it will be substantially higher once you add in all the non-construction costs such as infrastructure, planning, consultants?
Q11: Won't this mean that people who buy one of these £60,000 homes will be able to make a windfall profit?
Other initiatives
Q12: How does this competition relate to the First-Time Buyers' Initiative?
Q13: How does this relate to the London-Wide Initiative that is already underway?
Answers
Purpose
Q1: What is the purpose of the competition, why do you need to do this?
A: Construction costs continue to rise above the rate of inflation at a time when we need to build more for our money - not less. We need to work with industry to look at how best to construct homes more cost-efficiently, but without sacrificing quality. And we need to do this in a way that encourages people to join in a debate about what homes for the future should be like.
Q2: So the competition is not just for building £60k homes?
A: No. A significant percentage of the units in the competition will have a target construction cost of £60k, but the package includes a full range of size and type of units that should be built at an equivalent cost-efficiency.
It is important that while looking to demonstrate high-quality, cost-effective construction we also create sustainable communities. Thus all sites will be mixed-tenure with a range of size of housing units. All £60k homes have to be at least 76.5 sq m - a good size to meet changing lifestyles.
Q3: Is English Partnerships favouring MMC over traditional methods of construction?
A. No. The competition is open to all types of building methods, suppliers and materials. English Partnerships is committed to working with, and stimulating, the development and construction industry to apply a range of solutions that will not only improve the quality of our homes but also speed up the much needed supply line. This includes exploring the potential of Modern Methods of Construction.
Q4: Can you really build a quality home for £60,000?
A: Yes. We know that there are already some one-off examples of good quality homes that have been built cost-effectively, but commercial sensitivities mean that this information is not widely circulated. Through the competition we want to make costs more transparent, setting a benchmark for quality and cost-effectiveness that others can follow. Most of the bidders to Stage 2 met the cost challenge but not all were strong in design.
Q5: Will English Partnerships sell the sites to the winners?
A: Yes. The bidders for Stage 3 will need to make full development proposals and meet English Partnerships' required reserve price for the land.
Q6: What will the mix of houses be?
A: We will not be specifying what percentage should be for sale or rent and what the private and social housing mix shall be. This is a local decision related to the specific sites. However, we anticipate that there will be a significant percentage of affordable housing, including about 30% of homes being included in the First-Time Buyers' Initiative.
Scale and finances
Q7: Is the competition going to be of sufficient scale to make a difference - manufacturers need a commitment to at least 3,000 units?
A: We believe that there are other factors apart from volume that will make a difference. The initial sites in the competition will total about 1,000 units. For example, this could give three developers and their suppliers an order equivalent to one house/day for 18 months – which would make a significant contribution to their order book.
Who will be eligible for the homes/what is the cost?
Q8: Where did this figure of £60k come from, on what is it based?
A: We looked at a series of data sets, such as those produced by RICS Building Costs Information Service and the Tender Price Index of Social Housing, as well as real life case studies, to identify what might be a challenging but achievable figure for the core costs of constructing a home.
Q9: You say that 30 per cent of the competition homes will be reserved for people under the First-Time Buyers' Initiative. But will this 30 per cent actually be £60k properties?
A: No. It will be a mixture of homes from different price categories.
Q10: What will be the sale cost of the homes if the build price is £60k? Surely it will be substantially higher once you add in all the non-construction costs such as infrastructure, planning, consultants?
A: Through the competition developers and builders will be challenged to build a quality home for £60,000. The homes in the competition that contribute to the First-Time Buyers' Initiative will be available under the terms of the initiative and thus these buyers will, at a minimum, pay construction costs. The cost to buyers of all the other homes built during the competition will depend on the specific circumstances of each development, locality and planning requirements.
Q11: Won't this mean that people who buy one of these £60,000 homes will be able to make a windfall profit?
A: People who buy a home under the terms of the First-Time Buyers' Initiative will, when they move on, be able to realise any increases in value only on the proportion of the equity they own.
This is similar to other low-cost home-ownership schemes offering shared equity (e.g. Homebuy).
Other initiatives
Q12: How does this competition relate to the First-Time Buyers' Initiative?
A: The competition is an adjunct to the main First-Time Buyers' Initiative (FTBi). It will be setting a quality benchmark for future waves of the FTBi to follow. It is likely that about 30 per cent of housing units within the competition will also contribute to the overall FTBi, however the precise requirements will depend on the specifics of each site and the response to the current consultation on low cost home ownership. It is important that we create sustainable communities and therefore each site will have a range of size and tenure of housing units.
Q13: How does this relate to the London-Wide Initiative that is already underway?
A: The London-Wide Initiative (LWI) was created to bring forward affordable homes for sale for a range of needs within the Capital. One of the objectives of the LWI is to challenge the traditional procurement methods and it is likely that lessons learnt from this will be translated into the new First-Time Buyers' Initiative, and the competition.