Offsite construction specialists The McAvoy Group have secured a multi-million-pound investment from London-based Blantyre Capital.

Although the specific level of financial backing is currently undisclosed, the company says the significant investment will support McAvoy in its continued growth in the offsite sector, and will also finance the group’s ambitious expansion programme.

The McAvoy family – Orla Corr and Conor McAvoy – remain as shareholding directors and fully active in the business. The current board will continue to be led by Mark Lowry, managing director, and will be joined by a director from Blantyre, further strengthening the existing management team.

Orla Corr, shareholder and director, said: “We are extremely excited to partner with a highly respected investment fund that is fully aligned with our vision for future growth and our strategic plan. It was important for our staff, our customers and our valued supply chain to join forces with a dynamic and reliable investor who will help accelerate our growth.

“We have our strongest project pipeline for many years and in a diverse range of sectors. Partnering with Blantyre will enable us to leverage industry-leading offsite solutions across the UK and Ireland and to continue to develop our award-winning digital construction strategy.”

Adam Phillips, head of investments at Blantyre Capital, said: “The offsite sector offers enormous opportunities for transforming construction and is a sector in which we are keen to invest. We are confident in McAvoy’s growth potential and we are looking forward to a highly successful and productive business partnership.”

The McAvoy Group has been providing offsite schemes and interim modular buildings for the past 50 years, and it has two purpose-built manufacturing centres in Northern Ireland spanning more than 150,000sqft. Current projects nearing completion include a new mental health assessment unit at Kingston Hospital in Surrey and the 630-pupil Paxton Academy in Croydon.

 

Source: Infrastructure Intelligence

Error, group does not exist! Check your syntax! (ID: 6)

 

Housing Minister, Julie James has announced that factory-made ‘modular’ housing should be used to quickly increase the number of high-quality social and affordable homes being built across Wales – part of a new Welsh Government strategy to kick-start the modern methods of construction industry.
The Welsh Government wants councils to build far more Council homes at scale and at pace, however, they face the well-documented capacity constraints faced by traditional house builders.
To deliver more homes quickly, councils will be encouraged to use modern methods of construction (MMC), which will help them build better quality homes faster than traditional methods allow, in order to meet the growing need for affordable housing across the country.
MMC includes various construction methods from new materials and technologies, to off-site manufacturing, which either replace or complement traditional methods of construction.
MMC opportunities will also bring significant new benefits to the Welsh economy.
To back Welsh business, Ministers plan to help this next generation of homes to be built utilising national assets such as Welsh steel and Welsh timber. There will also be a focus on using the emerging MMC industry in Wales to pursue Welsh social and ethical ambitions, including developing skills and market-leading technical expertise in communities hardest hit by the decline of traditional industries. Investment will also help firms invest in locally sourced labour.

Other benefits include:
• creating new jobs and developing the new skills required to accommodate greater use of MMC, which will represent a sea-change in the construction industry
• upskilling the existing construction workforce
• attracting new and diverse entrants from marginalised groups such as offenders and those who wouldn’t necessarily consider careers in traditional construction such as women

As part of the Welsh Government’s new Modern Methods of Construction strategy ‘Reimagining social house building in Wales’, which is being published today, Ministers are making a major £45 million investment in the modular housing industry in Wales, to ensure it can deliver the next generation of social housing that people need.

 

Error, group does not exist! Check your syntax! (ID: 6)

 

£20 million is being made available for MMC businesses, who in partnership with Welsh social landlords, want to build the next generation of social housing. This investment is designed to help and encourage the market, especially SMEs, to develop off-site manufacture (OSM) solutions such as supply chains, factories, skills development centres, that meet the needs of the next generation of social housing in Wales.
A further £25 million is being made available for round 4 of the Welsh Government’s Innovative Housing Programme, which will focus on innovative housing delivered through MMC.
The strategy supports the Welsh Government’s ambitions to reduce carbon emissions from the housing sector. It also supports move to a circular economy, as building with MMC could reduce construction waste by as much as 70-90%.
Yesterday the Housing Minister today witnessed MMC in action on a visit to SO Modular in Neath, who already supply the social housing market in Wales.
Housing Minister, Julie James said:
Building more social and affordable homes is a key priority for the Welsh Government. Over the last 4 years, this Welsh Government has invested £2 billion in new housing across Wales, as part of our ambition to deliver 20,000 affordable homes by 2021.
But we want to build more. And we want to build better. The significant investment we’re making in the modular housing industry will enable us to do that.
Gone are the days of MMC’s association with poor quality, temporary, pre-fabricated housing; MMC now produces high quality, desirable and energy efficient affordable homes that tenants can be proud of. We have certainly moved from Pre-Fab to Ab-Fab!
Developing the MMC industry in Wales presents us with a great opportunity to not only build beautiful new social housing, but also kick-start a new industry that will become increasingly important for our economy.
The publication of the strategy is in response to a recommendation made by the Welsh Government’s Affordable Housing Supply Review, which identified Modern Methods of Construction as a way of more quickly increasing housing supply.

Source: Wired.gov

 

Deborah Rowntree looks at how we can use AIRSPACE

Rooftop development has been given significant airtime recently. The market-leading innovator in this sphere, Apex Airspace, has received just under £20m of funding from the Mayor of London and Homes England in recent weeks – representing a welcome further emphasis from all levels of government on innovative methods of housing delivery.

According to Sadiq Khan’s draft London Plan, 66,000 homes are needed each year for the next decade in the capital alone. Change is clearly required if we are going to solve the ongoing housing crisis in the UK, and embracing new, advanced methods of development is a major step.

Airspace development is the process of constructing units on top of existing residential, commercial or retail properties – building up, not out. It’s estimated that there is space for 180,000 new homes in London alone, which would represent 42% of the need identified by the London Plan. Undoubtably, the opportunities on a national scale are vast.

However, airspace doesn’t just mean building more expensive penthouses. For local authorities, one of the major benefits of this method is its inherent suitability for developing affordable housing. The £10m boost from the Mayor’s Innovation Fund will allow Apex to partner with more councils across the capital and deliver new schemes that could provide 100% genuinely affordable homes. The Government’s investment in airspace development is welcome, and local authorities should recognise how airspace can help them satisfy social housing objectives.

 

Error, group does not exist! Check your syntax! (ID: 2)

 

Taking stock

Airspace development is well-suited for local authorities as they hold extensive amounts of existing housing stock. Across the UK’s densely developed cities, councils are sitting under swathes of valuable airspace without realising how much the air above their rooftops is worth. Rooftop development helps them maximise their assets, and increases the value of the buildings simultaneously, representing a sound investment.

In addition, development is done with minimum disruption to incumbent residents, as homes are built offsite using modular construction and arrive on site 95% complete before being installed. Modular is one of the most exciting innovations across property and is favoured by Government as one of the keys to addressing delivery shortages and improving efficiency.

The result is precision-engineered affordable homes, built on top of existing developments in ready-made communities. Unlike developing on new – often brownfield – traditional sites, airspace development doesn’t involve unlocking land, identifying up-and-coming boroughs or onerous pre-commencement remediation. By building on existing developments, homes are delivered in areas which already contain the necessary infrastructure such as schools, hospitals and transport links for people to move into established neighbourhoods straightaway.

Reach for the sky

If we’re going to meet housing targets, councils need to be ambitious. However, there are undoubtedly challenges as airspace development continues to grow.

Identifying suitable buildings for adaptation is typically the first hurdle. While there is great potential to build upwards in local authorities across the country, finding the right base can be an intricate process.

For this reason, strategic partnerships are crucial. Councils need to team up with specialist developers who bring the necessary expertise to navigate the untrodden ground that a new form of development typically entails.

From a technical perspective, these challenges start with negotiating financing and bespoke contracts for deals – the specifics of airspace don’t conform to standard documentation. As such, when facilitating the deal with Homes England, we needed to be alive to the challenges thrown up by negotiations with existing freeholders and leaseholders, planning impacts on rights to light, and convincing lenders and mortgage providers to engage with modular built homes.

Building up

It is encouraging to see government embracing a new way forward – and upward. As more rooftop homes are built, the potential of airspace development to help local authorities build affordable housing will become more and more evident.

Every suitable council-owned property in the country represents an opportunity, and in the context of a national housing shortage, local authorities can scarcely afford to ignore this missed chance to provide new affordable homes.

Policy makers are already responding, and airspace was referenced in both the draft London Plan and the National Planning Policy Framework (NPPF) last year. We now hope that more local authorities will show willing to adopt this fresh approach.

Deborah Rowntree is senior associate in the real estate finance team at Winckworth Sherwood

 

Source: LocalGov

 

Expo 2020 Dubai takes on greater significance for UK post-Brexit

Expo 2020 Dubai will provide the perfect platform for the newly divorced United Kingdom to showcase itself to the world.

While the UK left the European Union (EU) on January 31, the country has entered an 11-month transition period that keeps it bound to the EU rules until December 31, 2020.

That coincides with the UK’s participation in Expo 2020 Dubai, which is set to run from October 20 this year to April 10, 2021.

Simon Penney, HM Trade Commissioner for the Middle East, told Arabian Business: “It’s bang in the middle of the UK leaving the European Union on December 31, so it is the UK’s first global event where we will be represented on the global stage, which is a fantastic point for the UK to showcase global Britain.”

Error, group does not exist! Check your syntax! (ID: 2)

 

The 3,417 square-metre, two storey UK pavilion is due to be delivered in May or June this year at an estimated cost of $18 million.

Highlighting a drive for AI and space exploration, the pavilion will showcase innovations in culture, education, tourism and business.

Founding partners of the pavilion are De Montfort University (DMU) Leicester and London-headquartered HSBC.

Daniel Howlett, regional head of commercial banking, Middle East, North Africa and Turkey, told Arabian Business: “The UK is the largest single corridor for HSBC from a UAE perspective. We’re keen to continue building that. We’re confident when you look at the UK pavilion, it’s going to be outstanding.”

 

Source: Arabian Business

The housing sector is calling for quality measures to be embedded into contracts to ensure the industry improves standards.

At The Housing Forum’s Quality Counts conference, architects, contractors, suppliers and sub-contractors identified procurement as the stage in the housebuilding process that will have the most impact on quality.

Their suggestions included building in quality measures and check points within each stage, being specific on standards that must be adhered too and stating the minimum quality expectations, all within the initial contract.

They also called for roles within design and procurement to engage with parties involved in the build and occupancy stage much earlier in the development to give a more realistic indicator of time scale and cost.

Stephen Teagle, chair of The Housing Forum, said:

“I tend to break down the approach to quality in to four areas: design; procurement; build and customer experience. We have tools and solutions for design, build and customer experience, but all attendees touched on the issues experienced during the procurement stage.

“Often the industry is racing to deliver on time which can result in a failure to consult the supply chain effectively. We need to look at the relationship between the different parties involved at all stages to help address the fragmentation of the industry.”

 

 The use of technology was another key theme to emerge from the Quality Counts event. As well as embracing newer technologies and processes linked to Modern Methods of Construction (MMC), groups discussed how existing technologies such as smart phones could be utilised to help streamline and accurately record data for quality assurance purposes. 

 

As part of its commitment to quality, The Housing Forum has also released its new A Quality Home for All manifesto. The manifesto calls for a far higher number of affordable homes to be built, properly funded Local Authority planning services, and the appointment of a Secretary of State for Housing.

It has also written to all main party candidates standing in the General Election in England, urging them to place quality house building at the heart of their political agenda.

To download the manifesto, visit The Housing Forum website. www.housingforum.org.uk

Error, group does not exist! Check your syntax! (ID: 4)

The government has released the report of the Building Better, Building Beautiful Commission.  Our readership constitutes individuals who collectively would have to bring about the changes recommended in this report. Whilst it acknowledges the desperate need for social housing, it also seems to hark back to a time when money and time where in greater supply and ideals of philanthropy so perfectly demonstrated in housing provision by individuals such as George Cadbury could be expounded without compromise.  In such times individuals rather than government bodies were far more in control of social house provision and that allowed their vision to be bridled only by the funding at their disposal.

The report focuses strongly on the negative role of the motor car when affecting design in both our homes and the spaces around them but it asks for a complete re-think of planning which would be difficult without the virtual eradication of the motor cars.  Without a technological advancement that is quite beyond our current status, the replacement of the car is not going to happen quickly.

Given that the times we live in are so radically different from those of the late 19th early 20th centuries, we question whether the approach suggested by the report has any practical relevance to construction today.  It might be suggested that the report tells us nothing that we do not already know and equally gives no real solution, which raises the question, what is the point?  We have included some extracts from it below and would really welcome the comments of those of you who look at our industry from the mud and grit of the construction site rather that what might be seen as the view from ivory towers, where distance blurs the hard edges of reality.

 

Error, group does not exist! Check your syntax! (ID: 2)

 

……….It is not often that a government adopts beauty as a policy objective. But such is the remit of this Commission, and we fully endorse the thinking that has led to it. It is widely believed that we are building the wrong things, in the wrong places, and in defiance of what people want. A comprehensive recent study agrees, arguing that about three quarters of new housing developments are mediocre or poor.1 At a time when there is an acute shortage of homes, there is therefore widespread opposition to new developments, which seem to threaten the beauty of their surroundings and to impose a uniform ‘cookie cutter’ product that degrades our natural and built inheritance. People want to live in beautiful places; they want to live next to beautiful places; they want to settle in a somewhere of their own, where the human need for beauty and harmony is satisfied by the view from the window and a walk to the shops, a walk which is not marred by polluted air or an inhuman street. But those elemental needs are not being met by the housing market, and the planning system has failed to require them. The Commission on building beautifully was set up at the end of 2018, asking us to review the planning system that has regulated construction in our country over the last hundred years. Ours is a discretionary system. The right to build has been nationalised. However, it does not proceed by top-down control from government, but by the granting of permissions decided locally. This allows a voice to the many interests involved, including the interests of neighbours, and reflects the historical origins of our legislation, largely introduced under pressure from civic associations motivated by the desire to protect our natural and architectural legacy from thoughtless destruction in the wake of the industrial revolution. It has also meant that, in comparison with many other countries, the planning process as we know it is both uncertain in its outcome and unclear in what it permits, involving high risk for the developer and sparking often fierce resistance from local communities. Large estates of low-quality housing naturally arouse opposition from those whose amenities and property-values they threaten, and precious aspects of our built environment and countryside give rise to a strong desire to protect them from changes that might spoil them. The cumulative effect of this, together with a rise in litigation from developers, has been a stagnation in the planning process, and a sense that – despite the greatly increased wealth that this country now enjoys, in comparison with what was enjoyed by our predecessors in the early 20th century – we are building less beautifully than they, and indeed littering the country with built debris of a kind that nobody will want to conserve. What has gone wrong, and how can we change it? Those were the questions before the Commission, and this report is our answer to them. It is not the final answer; but it is the first step towards understanding the direction in which our planning policy should go…………..

 

….. Cities built with the aim of accommodating the car therefore have to look very different from the traditional city. If three parking spaces are required per household, as occurs in some local authorities, then terraces, streets, squares and mansion blocks become nearly impossible. The traditional shopping crescents and high streets tend to be abandoned and replaced with out-of-town retail centres, surrounded by fields of cars. Offices and government buildings are transferred to business parks, with their own parking lots. Walkability and mixed-use neighbourhoods are swiftly imperilled. We do not need to imagine this: in much of the United States it is the norm, with residential settlements starting life and remaining as car-dependent sprawls. Once the car starts to take over, the process becomes self-reinforcing: even people who would prefer to walk to the shops have to drive if there are no shops in walking distance……

 

……… The government of Harold Macmillan did oversee the rehoming of vast numbers of the poorest families out of inner-city slums into the ‘fresher air’ of the new housing estate; arguably the highest annual delivery of new homes we have seen in this country. However, what happened next was cheap system-building, often corrupt procurement, the ‘vertical slums’ that were poorly constructed and often equally poorly managed, leading to isolation and crime, that and were a far cry from the neighbourliness and family life they promised. We have learnt from these mistakes. Over more recent decades, new affordable housing has often been built by housing associations and councils to higher space and design standards than much of the housing for sale that this Commission has seen. As landlords, housing associations and councils have a long-term stake in these places and a commitment to the people living there, to offer the best quality of life they can. However, the severe shortage means that opportunistic developers can abuse permitted development rights to produce accommodation of the lowest quality to house those with no alternative. As the TCPA’s Raynsford Review pointed out, there is no beauty in a child having to use a car park as a play area or being housed in a glorified shipping container next to a flyover, on the argument that it is better than nothing. We believe that all homes – new build or conversions – should meet minimum standards for space, amenity and comfort, as well as the safety of the people that live there…..

 

Living_with_beauty_BBBBC_report

And completes its role in construction of Ain Dubai

Netherlands-headquartered engineered heavy lifting and transport firm Mammoet has successfully completed its role in the construction of Ain Dubai, the world’s tallest observation wheel.

Developed by master developer Meraas, Ain Dubai sits on Bluewaters in the heart of Dubai and once operational, it will provide residents and visitors views of the Dubai city and its shoreline.

Mammoet’s journey with Ain Dubai began in 2014, when the main contractor on the project Hyundai Engineering & Construction (HDEC), awarded it the heavy lifting contract to install the key structural elements of the wheel.

 

Error, group does not exist! Check your syntax! (ID: 2)

 

Since it was involved in the early stages of the project, Mammoet presented an installation method that delivered greater efficiency, safety, and cost-effectiveness.

The firm proposed installing the largest elements, the legs and spindle, directly from the barge, which arrived at the foundations with two super heavy lift cranes. This eliminated the need for temporary storage, multiple barge transports, and working at extreme heights.

In 2016, Mammoet successfully positioned Ain Dubai’s four legs onto their foundations and lifted the spindle. The legs and the spindle were prefabricated offsite by others before being transported by barge to the installation site, which saved time and improved safety.

In doing this, Mammoet also reduced the number of barge trips required and each component was built safely at ground level before being lifted into place.

Each of the 890-ton legs measured 126m in length and 6.5m in diameter. They were rolled onto Mammoet’s barge using 40-axle lines of SPMT at the fabrication yard in Abu-Dhabi.

For the installation, Mammoet paired the world’s biggest crane – PTC 200-DS – a 5000-tonne ring crane, with a 3000-tonne (T) crawler crane. Together they ensured the stability and flexibility required to lift each leg and the spindle from the barge into position, whilst working 137m above the ground.

Mammoet set a world record by lifting the 1,900T spindle to sit on top of the four legs: it was the world’s heaviest and highest tandem lift ever completed.

 

Following the positioning of the legs and the spindle, Mammoet lifted eight rim pieces and temporary spokes.

The 3000T crawler crane was the only crane capable of carrying out these lifts. Its high capacity combined with its long lift radius could meet the distance between the barge and the installation point and lift each 700T section in one motion, without the need to set them down or reconfigure the crane.

Over a period of three and a half months, Mammoet supported the removal of the temporary spokes until all eight temporary spokes were disconnected from the wheel. Each 112m-long spoke, weighing 470T, was lifted off the structure in tandem by Mammoet’s 600T and 400T crawler cranes.

Commenting on the incident-free delivery, commercial director at Mammoet Middle East and Africa, Michel Bunnik, said: “Having been involved in the construction of many of the UAE’s iconic landmarks, such as Burj Al Arab and its expansion, Dubai Metro, Dubai Mall, and the luxury Five hotel on Palm Jumeirah island, we are pleased to add another one to our successes in the Middle East.”

Bunnik added: “Engineering capabilities, operational excellence, and the remarkable cooperation of the entire project team ensured that the project was delivered successfully and incident-free.”

 

Source: Construction Week Online

 

2019 raised the awareness of climate change, and it also saw an increasing number of holidaymakers opt for a staycation in the UK.

The government has been behind an initiative to support eco homes with its cleaner heating scheme (part of the Future Homes Standard) planned to be in full operation by 2025.

Offering attractive, eco-friendly and energy efficient homes is also appealing to furnished holiday let landlords and investors, with a growing number of guests looking to do their bit for the planet and holiday in the UK.

Julian Walker, director at the agency Spot Blue International Property, comments: “For anyone in the market for a holiday home this year, buying an eco-friendly property in the UK and letting it to the domestic market, so guests don’t need to travel far, makes a lot of sense.”

In June last year, the UK became the first first-world country to pass laws that should end its contribution to global warming by 2050. The new target is to bring all greenhouse gas emissions to net zero by 2050, compared with the previous target of at least 80% reduction from levels in 1990.

Property investors look to greener options

Julian Walker adds: “We anticipate that the UK’s furnished holiday lets market will continue to become a popular investment choice. The fact that holiday lets produce far higher weekly rental yields than long-term lets is not the only advantage for investors and landlords.

“Undoubtedly, 2019 was a turning point in the global drive to raise awareness of climate change.

“This is thanks largely to the likes of David Attenborough, Greta Thunberg and Extinction Rebellion, who continue to keep the issue firmly on the agenda while forcing many of us ordinary people to ask questions about our own energy use and carbon footprint.”

Energy efficient modular building

The concept of modular design and construction methods in the residential development sector has been gaining traction in the past few years. At MIPIM last October, Esther McVey, the UK Housing Minister, spoke about the benefits: “Industry has told us some homes built using modern methods can have 80% fewer defects and heating bills up to 70% lower. Homes built using modern methods can be of higher quality, greener and built to last. I want to see a housing green revolution.”

 

Error, group does not exist! Check your syntax! (ID: 2)

 

This efficient and fast way of building lends itself to holiday homes. According to Spot Blue International, the amount of waste over the building phase in comparison to traditional housebuilding methods, according to specific measurements, is reduced by large levels. Labour time is reduced and this reduction in man hours results in decreasing travelling time to and from site, which helps reduce the carbon footprint further.

Walker says modular homes’ green credentials start before they’re even built. “And they continue for decades, even centuries, after they’re built,” he adds, while modern modular homes are also built to last a lot longer than traditional homes.

Modular homes adapt well to the holiday letting market; cutting-edge insulation materials mean they retain heat and landlords benefit from typically around 60% less going on utility bills than traditionally built properties.

By becoming more widely available, having these options is expected to “encourage UK tourists to travel less, thereby reducing not only the owners’ but the nation’s overall carbon footprint”.

 

Source: Buy Association

 

 

 

People experiencing homelessness in Cambridge will soon be housed in new micro-homes around the city centre.

Created by homelessness charity Jimmy’s and the Allia Future Business Centre, the six modular homes are some of the first of their kind in the UK.

There will be five homes for those experiencing homelessness, and a sixth unit will be for the support team, on Newmarket Road, on the grassy lawn adjacent to the Christ the Redeemer Church.

The modular-style homes are to be “temporary,” with permission sought for three years and will be available early this year.

If the land, currently unused, is needed for other uses, then the homes can then be relocated elsewhere, since they are portable, with residents having the choice to move with them.

They are also being built by a social enterprise, New Meaning, that employs people who have faced homelessness themselves.

Jimmy’s support team will provide daily, high-quality, intensive support to help make this new opportunity work for each person and break the cycle of homelessness.

 

Error, group does not exist! Check your syntax! (ID: 2)

 

Jimmy’s will also work with each person to find more permanent accommodation during the time they are living there.

The modular homes will only have 25 square metres of internal floor space – even though council policy states homes should be above 37 square metres – but it will be an “efficiently designed space that creates a separate bedroom, bathroom and utility room, with a shower and washing machine, and an open plan living [and] kitchen area,” according to the planning application.

The charity is seeking funds to help them furnish and equip items that will transfer the houses into homes.

It has been suggested by councillors that more micro-homes for the homeless could be built elsewhere, such as on Parker’s Piece.

In November, Allia acting chief executive Martin Clark said more of the homes are in the pipeline.

These six homes were approved by Cambridge City Council in November.

 

Source: Cambridgeshire Live

 

 

An investigation by Tom Calver

 

An Englishman’s home may be his castle, but for an ever growing number of buyers, that may mean a property less than 37 square meters – or the size of a tube carriage. High demand, skyrocketing prices and lifestyle shifts have led to the rise of the micro-property – but what does this mean for buyers today?

The UK property market boasts an increasing number of homes smaller than 37sqm, the minimum studio floor area under national standards. Almost 8,000 new micro-homes were built in 2016, the highest number on record, according to Which? analysis of Land Registry data.

As developers rush to use more flexible planning laws and carve up office blocks into homes, prospective buyers should be cautious: our research suggests micro-homes don’t necessarily grow in value like their larger counterparts, while some mortgage lenders won’t lend on them at all.

In this special investigation, we explore:

The growing prevalence of micro-homes

The areas with the most micro-homes

How micro-homes increase in value compared to larger properties

The mortgage providers that won’t lend on small properties

How common are micro-homes?

 

A ‘micro-property’ has no strict definition, but typically, the term refers to properties with a floor area below 37sqm – which is the minimum size for a studio under the government’s national Technical Housing Standards.

However, these standards aren’t legally binding. Where there are housing shortages, developers can apply to local authorities for permission to build smaller homes and councils cannot reject properties on grounds of size alone.

In 2013 the Government introduced so-called “Permitted Development Rights” (PDR) which allowed builders to convert offices into residential homes without submitting planning applications. Since then, the number of new micro-properties has rocketed.

Developers have been purchasing disused office spaces, like this one in Croydon, and splitting them into many small studio and one-bedroom flats.

This trend isn’t confined to the London suburbs. Our research showed high numbers of micro-properties are being built in urban areas like Leicester, Liverpool, Cambridge and Bristol:

 

Source: Department for Communities and Local Government

 

 

The term ‘micro-property’ covers a broad spectrum of homes, including poorly thought-out flat conversions with toilets in the kitchen or showers in the living room. But many of the new properties produced under Permitted Development Rights use space in an intelligent way, according to developers who spoke to Which? For instance Inspired Homes who boasts a property with a separate bedroom – yet has just 31.5 square metres of floor space:

Gwyn Roberts, of housing charity BRE, says size is less important than innovative and practical design: ‘Small homes that are not well-located, have poor indoor environment and are generally designed and constructed poorly would not reach [our standards].’

“[However], many micro-flats are well located, have communal space inside and out and are well designed to have property ventilation, sound insulation and more.”

Martin Skinner, chief executive of Inspired Homes, suggests younger buyers in particular tend to have lifestyles that suit smaller apartments, citing the ‘growth of the sharing economy and more possessions like music and film collections stored in the Cloud.’ He says that many of their PDR properties have opted for ‘flexible furniture solutions’ – including desks that transform into dining tables.

 

Do micro-properties grow in value?

 

It’s not hard to understand the attraction for some buyers, especially as rising prices in some regions price many people out of the market. Often, micro-properties offer a cheaper alternative to regular houses. In 2016, properties in London smaller than 37 sqm cost just £279,000, according to Land Registry data. Though not exactly cheap, it’s less than half the average price of a London home sold in the same period (£580,000).

While micro-homes are a cheaper way of getting onto the housing ladder, it’s important to consider whether your investment will grow in value over time.

As part of our investigation, we combined information on property sizes from the Department for Energy with house price data from HM Land Registry, covering nearly 3m properties. We then compared the average price of properties sold in 2016 with those sold between 2013 and 2015 to measure the price growth of different-sized homes.

Our analysis showed properties with floorspace of between 50 and 120 sqm had the best price growth in the period.

However, homes smaller than the national minimum space standards did not perform as well; price growth for properties smaller than 37 sqm was 6.9%, compared with 8.7% for homes larger. This is despite almost two-thirds of these smaller properties being located in London and the South East, which have seen massive rises in house prices in recent years.

That trend continues for even tinier homes: properties smaller than 30 sqm grew just 5.4% in value between 2013-15 and 2016.

In London, micro-homes did slightly better: properties smaller than 37 sqm grew 11.8% between 2013-15 and 2016. However, this was still much less than the 14.5% growth for all other properties in the capital.

 

How big is 37 sqm?

 

We Brits have some of the smallest homes in Europe, at an average of 76 sqm – that’s a slice larger than a squash court (62.4 sqm). By comparison, the average size of a property in Denmark is 137 sqm, according to research published in 2014 by Find Me A Floor.

National space standards suggest that a one-person dwelling can’t be smaller than 37 sqm. That’s about the same internal space as a tube carriage, and a fair bit larger than the average Travelodge room, which is 28 sqm.

However, we’ve found many newly converted office developments with floor areas of 16 sqm. For reference, that’s smaller than the size of a sumo wrestling ring.

 

Barnet House is currently being converted by Meadow Residential into flats. We found one studio in Brent that was just 8 sqm – more than 3.5 sqm smaller than the average UK parking space (11.5 sqm) and only 1 sqm larger than a prison cell. A three-bedroom house was converted into six studio flats, but in 2015 Brent council since ordered the development to be turned back into a house.

 

Error, group does not exist! Check your syntax! (ID: 2)

 

Who’s buying micro-properties?

 

Micro-homes are cheaper, usually closer to city centres and often too cramped for families with children. For those reasons, it’s not surprising that they’re mainly bought by first-time buyers, according to Inspired Homes. CE Martin Skinner says ‘these buyers are typically single professionals in their early thirties or young couples in their twenties combining salaries to purchase together. We also get a lot of siblings who team up to purchase the two-beds’. However, he adds that it’s investors who get the first dibs, with many reserving early to benefit from capital growth. In fact, plenty of micro-properties are listed on property portals as ‘Investor Opportunities’, offering ‘guaranteed’ gross rental yields.

 

Are micro-properties un-mortgageable?

 

Why don’t micro-properties grow in value like regular sized properties? A simple reason might be that many buyers aren’t eager to sacrifice space for convenience.

Another reason, however, could be the ability to borrow to buy them. If most buyers cannot easily get a mortgage on the property, this may limit price growth over the long-term.

We asked six major mortgage providers whether they had special criteria on lending for smaller homes. While HSBC didn’t comment, Lloyds Bank, Barclays and Santander all said they didn’t have a specific size limit, but that they lend on the basis of a professional valuation. For example, Barclays said it requires flat conversions to have been developed with ‘reasonably sized rooms’, but said that this is ‘down to the valuer’s professional opinion.’ However, Nationwide and RBS wouldn’t lend on properties with floor areas smaller than 30 sqm. RBS added that smaller properties run the risk of ‘restricted demand’ and ‘volatile pricing on resale’. David Blake from Which? Mortgage Advisers encouraged buyers to do their research, saying: ‘I would suggest anyone thinking about buying a small flat should speak to an independent mortgage adviser to understand their options, but also think about the re-saleability of the property and if demand is likely to remain strong for that type of property in the future.’

 

The future of property?

 

With modern facilities and intelligent space solutions, the micro-homes of today are a far cry from the inner-city studios of old where you could touch the toilet from your bed.

Demand for cheap, inner-city housing, coupled with rising prices, have driven up the supply of this type of property. But it remains to be seen whether they offer viable returns to owners – or prove to be homes that people actually aspire to live in.

Source: Which?