The productivity conundrum facing UK house builders

Feb 26, 2019 | Education

6 min read

UK construction stakeholders face a productivity conundrum, with multiple challenges and opportunities at stake. This was highlighted in our recent article “Key UK productivity challenges and opportunities.” UK house builders do not escape unscathed by productivity issues during the widely acknowledged current UK ‘housing crisis’.

UK house builders vary from self-builders, custom builders through to volume house builders and increasingly offsite and modular house builders. Housing projects may be procured in several ways, via traditional contracts, design and build or management contracts or through more collaborative construction contracts.

The vast majority of houses built today in the UK are by privately owned volume house builders, form part of low-rise developments and are procured via a design and build process. The 2017 UK government report “Capacity in the homebuilding industry” stated that the 8 largest firms build over 50% of all new homes.

Here Script&Go, BatiScript’s developer and present in the UK, examines the challenges and opportunities facing the house building sector today. It investigates the productivity challenges and opportunities facing these UK construction stakeholders and aims to provide pointers to how their productivity, and consequently construction quality, can be improved.

The UK housebuilding political context

UK house building was the subject of a UK government debate at the start of the year. The motion of the House of Lords debate was “this House takes note of the performance of the UK’s major house builders.”

It was argued that the house building levels in England have failed to keep up with demand contributing to a housing shortage and rising house prices. It was stressed that the number of new homes completed annually has consistently failed to match projected household formation levels. Although housing policy is devolved to each UK country, this scenario is echoed in Scotland, Wales and Northern Ireland too.

This debate has led some UK experts reconsider their projections and these suggest that 220,000-300,000 additional units per year are required to until 2030 to meet demand. However, as pointed out by experts, simply providing new homes is not the key issue, homes need to become less expensive to build while maintaining and improving quality and performance.

Script&Go believes improving housing performance and quality will improve productivity . It realises the UK housing supply and demand flows are ‘out of sync’ and believes a ‘perfect storm’ has been reached in the market, rendering it ripe for change.

3 Productivity challenges facing UK house builders

Three productivity challenges facing UK house builders in the UK are performance issues, socio-economic and political issues and workforce issues. They all contribute to negatively impacting wealth, by diminishing quality, increasing pressures on time, continuing the prevalence of an adversarial, uncollaborative culture and deploying unsustainable processes.

Performance issues : pressure to build houses more productively

As already mentioned, this year’s House of Lords debate highlighted the performance of UK house builders, in other words the pressure for hous ebuilders to increase their productivity, which is to say the need for them to build to a higher quality and/or faster. This implies that improvements will not happen by changing government policy alone.

Script&Go finds this interesting. It notes that results from a 2013 academic research paper from the University of Strathclyde, “Achieving quality and productivity in the house building sector” showed that implementation of a quality management system (QMS) linked to BS5750 (equivalent to European Standards EN29000 and International Standards Organisation ISO9000) directly improves productivity onsite.

Socio-economic and political issues : new housebuilding approach needed

The UK government’s whitepaper last year “Fixing our Broken Housing Market” blamed the supply shortage and the fact that the house building market has come to be dominated by the private sector with public sector house building in long-term decline. It outlined the Government’s plans to ‘fix’ the market and it’s call for a new approach that includes:

  • Building houses based on need
  • Diversifying the housebuilding market
  • Building houses faster
  • Increasing house purchase affordability

Some have suggested that this whitepaper is hardly groundbreaking and does not go far enough, Pressures on available land for building homes are well acknowledged too.

Script&Go is inclined to agree. Measures to improve housing quality are also not specifically highlighted, although recognised by major housebuilders as important (whether for snagging or defect reporting purposes), as quality forms part of a general housing need today.

Workforce issues : Brexit, lack of skilled workers and diversity in house building

UK housebuilders believe that Britain’s decision to exit the European Union (EU), dubbed ‘Brexit,’ will lead to a shortage in available staff. In 2017 a group of UK house builders, wrote that, based on current conditions, Brexit will make it more expensive to build homes. Some experts predict a ‘hard Brexit’ could see UK construction miss out on as many as over 200,000 EU workers.

Most UK house builders estimate that costs, including material and labour, will continue to rise over the next year and warn labour shortage will hit delivery of new homes. Already, in 2016, it was reported that around 3/4 of Britain’s housebuilders believe high costs and the unavailability of labour will negatively impact their ability to deliver new homes in the future.

Script&Go believes this is true. It therefore creates a requirement to not only continue to promote diversity and increase skills but also for more efficient construction management processes that capitalise on available labour and improve quality in order to add necessary value to housing products and improve their productivity.

2 Productivity opportunities for UK house builders

There are two principal opportunity axes for UK house builders, relate to housing construction type and housing construction cultural and process change. These both contribute positively by increasing wealth, through quality improvement and time efficient processes and being focussed on speed rather than haste, creating a collaborative culture and more sustainable outcomes.

Housing construction type change : house building construction evolution

UK housebuilders : housing transformation
Housing transformation

There are more types of housing construction in the UK than in almost anywhere else with around a million non-standard construction homes. The house building industry is changing yet again through Modern Methods of Construction (MMC), including offsite, modular, prefabrication, design for manufacture and assembly (DfMA). The Offsite Hub suggests offsite construction can solve the UK housing crisis and reiterates the fact that quality is suffering, with an increase in construction defects and low design performance.

Script&Go believes that as regulations and compliance measures in the sector become more onerous, and clients see improvements in quality available through MMC, it is likely more houses will be built in the UK with this offsite typology, but also a shift to higher housing densities and more mid-rise and high-rise developments to alleviate pressures on land and complement urban lifestyles.

Housing construction cultural and process change : house building digitisation and mobilisation

Productivity dilemma - Digitisation and Mobilisation
Digitalisation and mobilisation

The need to revolutionise attitudes to construction let alone housebuilding have been highlighted for a while, coupled with the drive for MMC, is the drive for increased digitisation and mobilisation of the industry’s workforce to capitalise on the benefits of cultural and process change, to lead to a more collaborative, transparent way of working with tools that harness the powers of automation, to achieve not only waste reduction, accountability and time savings but the improved quality houseowners and tenants are looking for.

Productivity dilemma - 'Push-Pull' of productivity rock
Infographic : ‘Push-pull’ of rock of productivity

Script&Go fundamentally agrees with this. The need for collaboration through digitisation and mobilisation across construction was outlined in it’s own whitepaper “Improving the productivity of the construction and infrastructure sector through mobile digital solutions.” This paper explains that the onus to improve productivity is on all. It shows a simultaneous “push-pull” approach by the UK government and across the construction supply chain is required.

By understanding the core challenges facing UK house builders (performance, socio-economic and political and workforce issues) and the opportunities (housing construction type and housing construction process change) UK house builders should be in a better position. They can then make an informed decision as to how to improve housing performance and quality and simultaneously their productivity.

Improving housebuilding productivity through collaborative software

Productivity dilemma - 'Push-Pull' of productivity rock
Infographic : Productivity transformation

Mobile digital solutions such as BatiScript provides house builders with a useful tool to respond to the construction cultural and process change opportunity. They provide UK house builders with the core benefits of quality control and saved time for increased productivity. Using these forms of collaborative defect management software leads to time saving efficiencies, waste reduction, improved management processes, higher quality and reduced risk. Deployable in full mobility, across operating systems on tablets and smartphones, these are also user-friendly, collaborative, cloudworking solutions.

The next step

To discuss your collaborative house building construction management software needs further get in touch with Script&Go’s UK team or to trial Site Snag for yourself.

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