Building Sustainable Towns and Cities · Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without

Building Sustainable Towns and Cities: Can modern methods of construction and micro living solutions help tackle the UK’s housing crisis

Nick Whitten, Director, Residential Research @JLLNickWhitten

September 2018

Agenda • UK housing delivery and its economic benefits

• A structural challenge

• Modern construction solutions

• Micro Living in the UK

• Looking forward – technological changes

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

1946

1948

1950

1952

1954

1956

1958

1960

1962

1964

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1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

Numb

er of

dwell

ings

PrivateEnterprise

Housing Associations LocalAuthorities

Housing Delivery across England

Source: JLL, MHCLG

In 2017, 224,000 homes were built • £38bn of economic output • 698,000 jobs • £5.9bn spent in local shops and services • £2.7bn paid in tax

Economic footprint of the UK housebuilding industry - 2018

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If we built 300,000 homes per annum • £14.2bn increase in economic output • Additional 260,800 jobs • £2.7bn additional expenditure in local

shops and services • £1.1bn increase in tax revenue Source: JLL, HBF

£0

£50,000

£100,000

£150,000

£200,000

£250,00019

5319

5519

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6319

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6919

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7519

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8119

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0120

0320

0520

0720

0920

1120

1320

1520

17

Hous

e pric

e

2008 Global Financial Crash

1980s Mortgage Market Deregulation

1980 Right to Buy Introduced 1960s & 1970s Strict Mortgage

Lending Criteria

2000s Credit Boom

2016 Brexit

UK house price

Source: JLL, Nationwide, Land Registry

28%

12%

40%

29%

31%

59%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2008

Now

Small builders (1-100 units) Medium-sized builders (101-2,000 units) Volume Builders (2,000+ units)

Structure of UK housebuilding industry

Source: JLL

Farmer Review – 10 symptoms to fix


Source: JLL

So what’s the solution?

MMC: Volumetric and Panelised – what’s the difference?

© 2017 Jones Lang LaSalle IP, Inc. All rights reserved.

Source: JLL

Benefits of adoption


Economic Social Environmental

• Build time • Smaller workforce

needed • Improved accuracy

of cost projections • Less waste

• Less disruption • Less accidents • Factories could return

manufacturing to economically-struggling locations

• Less waste to Landfill

• More sustainable building techniques

• Fewer deliveries

Source: JLL

Demand-side barriers


General view Perceived

Performance Investment

Agenda

• Lack of character, individualisation

• Fear of history repeating itself

• Mortgageability

Source: JLL

Solutions


General view Perceived

Performance Investment

Agenda

• Lack of character, individualisation

• Fear of history repeating itself

• Mortgageability

BIM Education/Marketing

Source: JLL

Trends in housing tenure – England


0%

10%

20%

30%

40%

50%

60%

70%

80%

% o

f hou

sing

tenu

re in

Owner-Occupiers Private Renters Social Renters

Source: JLL, EHS 2016-2017

60%

20%

17%

63%

24%

17%

17,650,000

5,600,000

4,760,000

17,440,000

6,980,000

4,940,000

Urbanisation – changing people’s housing needs


Connectivity – Wi-Fi is now a crucial enabler of sharing platforms such as Uber and Spotify

Accessibility – ease of access to amenities drives ability to ‘use’ rather than ‘own’

Location – Central locations drive social interaction and facilitate sharing initiatives

Amenities – urban areas are home to a variety of amenities including eateries and leisure facilities

Rise of the sharing economy means people use amenities rather than own them

Source: JLL

Changing nature of UK households – trend towards smaller average sizes


Average age at birth of child

Number of marriages

Average life expectancy

Average household

size

1996

2006

2016

1976

1986

28.1 359k 72.8 2.9

28.9 348k 74.9 2.7

29.8 279k 77.1 2.5

30.7 239k 79.3 2.4

31.9 245k 81.6 2.3

Source: JLL, ONS

UK households – nearly two thirds do not contain children


22%

18% [PERCEN

TAGE]

21% UK

Singles and house sharersCouples no childrenFamilies with childrenRetirees

32%

14% 41%

14% London

Household type

UK London

Singles and house sharers (HMOs)

6.2m 1.1m

Couples with no children

5m 520,000

Families with children

11m 1.5m

Retirees 5.9m 500,000

TOTAL HOUSEHOLDS

28.1m 3.65m

Source: JLL, CACI

Ireland = 40 sq m

Singapore = 35 sq m

UK = 37 sq m

France = 14 sq m

Hong Kong = no minimum

Taiwan = 13 sq m

Australia = 30 sq m

Netherlands = 24 sq m

International minimum space standards compared Germany = no minimum

New York City = no minimum

Los Angeles = 32.5 sq m

Chicago= 42 sq m

Source: JLL

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HongKong *

China UK Italy Japan Spain Germany France Greece Denmark Canada US Australia

Popu

latio

n de

nsity

– p

eopl

e pe

r sq

km

Aver

age

hous

e si

ze s

q m

etre

s

Average house size sq m (LHS) Population density - people per sq km (RHS) Linear (Population density - people per sq km (RHS))

Correlation exists between smaller new houses and countries with higher population densities Average new home size by country

* 6,709 people per sq km

Source: JLL, Oxford Economics, RIBA

UK minimum space standards

© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. Source: MHCLG

Homes in England & Wales below minimum space standards


North East = 17,195

North West = 56,685 Yorkshire &

Humber = 38,235

East = 52,119

South East = 87,870

South West = 56,095

Wales = 18,468

East Midlands = 33,011 West

Midlands = 39,996

London = 153,212

EPC data shows there are at least 552,886 homes in England & Wales below minimum space standards

Source: JLL, MHCLG

Can technology provide modern Micro Living solutions?

Source: JLL

This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.

jll.co.uk/residential Twitter: @JLLNickWhitten

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Building Sustainable Towns and Cities · Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without