No end in sight to housing shortage - George OsborneBuilding technology provider, Buildpod International’s innovative construction method could lead to more more-affordable homes.

The Chancellor, George Osborne, recently gave evidence to the Lords’ Economic Affairs Committee. In it he said that demand for housing in Britain will outstrip supply for at least the next decade.

In the same breath he argued that the government’s Help to Buy scheme and planning reforms are addressing that problem, but what he ignored is the fact that while these incentives may envigorate some sectors of the housing market, they do nothing to tackle the high costs which are the fundamental problem of home construction.

On the contrary – to an extent they make it worse. As long as there is more money to be made by NOT building (biding time while land prices soar and unfulfilled demand pushes up prices) then the normal market mechanisms (innovation driven by competition resulting in lower prices) are being put out of action.

There are many ways to save costs, and other industries have managed to do so very successfully over the years. But the building industry faces few reasons to change.

The government’s tinkering with loans and planning permissions harks back to the days of the Milk Marketing Board and other interventionist measures which do nothing to support innovation and investment in new ideas and methods.

No other manufacturing sectors have been able to uphold this “business as usual” attitude but have been forced to reinvent themselves with the use of market forces and new technology. However, because construction is less mobile and less competition driven, things are not changing as they do in all other walks of life.

As a result homes are becoming increasingly unaffordable. Average prices are now more than five times earnings compared to less than three 20 years ago, while nearly every other industrial product has become cheaper in real terms.

Construction costs can be reduced through off-site construction of large building components. This improves quality and speeds up the building process, but many established “volumetric” building methods have their own problems such as high material costs or long term maintenance concerns.

This situation inspired a Danish architect to invent a building method that combines the benefits of off-site construction with the desirable properties of concrete which in many cases remains the preferred building material for its known strength and durability.

His “bPod” building system results in buildings essentially indistinguishable from traditional concrete construction at a cost that is 20-30% lower. They are made from concrete panels similar to those used in traditional concrete building, but instead of doing all the work on the building site in all kinds of weather, the panels are assembled into room sized pods in a factory.

The pods are completely finished inside, with everything from floor boards to the kitchen sink, and then transported to the building site for final assembly. This saves a lot of time and therefore money.

The system also saves concrete in construction and can be built to better insulation standards which results in massive savings on heating. Many different insulation materials can be used, from recycled paper for a greener footprint to space age insulation for thinner walls.

bPod can use many existing manufacturing facilities and requires little retraining of staff, but it does need someone to be the first to use it, and therein lies the rub: In today’s construction climate no-one wants to take a chance on something new. But until someone does, construction costs will not come down and the housing shortage will continue.