27 Aug 2015

CDM and the selfbuilder

In April 2015, the CDM (Construction Design and Management) Regulations were expanded to include selfbuild for the first time. This appears to be in response to a European Directive that all building works should be covered by Health and Safety legislation, regardless of the way the sites were run, or of their scale.  The UK government risked being fined if it didn't implement the Directive (which has been around since 1992) in the way the EU thought appropriate.

So now almost all building activity comes under the ambit of CDM. The only exclusion is if the work is truly DIY, with no paid contractors at all. But to counter the widening of CDM, the resultant duties have been made a lot simpler and easier to achieve.

The CDM regs began life in 1995 and received a major upgrade in 2007. The earlier versions of CDM specifically excluded domestic clients but made substantial administrative demands on small builders running commercial sites. There was a key appointment of a CDM co-ordinator who had to take on responsibility for developing a Health and Safety file and ensuring that everybody involved on the job had some level of competence. The 2015 regs not only do away with this Co-ordinator role but make no mention at all of competence. Maybe competence was just too much to police. Maybe it was dropped because it was needlessly bureaucratic. But it's gone, and with it much of the purpose of CDM.

What's left? The Health and Safety file is still required but the guidance offered by the Health and Safety Executive is to download an App called CDM Wizard (available only on Android and IoS, which shows just where this is being pitched). Fill it out — mostly a series of checkboxes, about 15 minutes work — and "This is the Construction Phase Plan of your job as required under CDM 2015." Sorted.

You still have to notify large jobs to the HSE before you start but very few selfbuilds will be of sufficient size to have to warrant a notification. The threshold is that the job lasts longer than 30 working days and has more than 20 workers working simultaneously at any point in the project,  or the job as a whole exceeds 500 person days. Most selfbuilds should take rather less time.

It is also noticeable that the 2007 CDM regs guidance was a much longer document and was frankly over-complicated. It didn't include any information about health and safety risks, merely their management. In contrast, nearly half of the 90-page CDM 2015 guidance concerns itself with managing specific risks you are likely to meet on site. 

For instance, if you are involved in demolition, you are required to plan and carry it out in such a manner as to prevent danger or, where it is not practicable to prevent it, to reduce danger to as low a level as is reasonably practicable. It's hardly going to say anything else, is it? You are also required to have a written record of your plans before commencing, but if you have filled out the CDM Wizard, you will be there already. 

So what exactly is required of today's selfbuilder, now that almost all building work comes under CDM?  The guidance includes a flowchart (p86) which is about as clear as mud, as it bandies around terms like DIY and contractor without defining them. But if you work your way through this, you will find that you are more than likely deemed to be a domestic client and that you really don't have to do anything because the people working for you, be they designers, main contractors or individual tradesmen, become responsible for CDM by default, unless you want someone in particular to act as the CDM guy.

I don't happen to believe that CDM 2015 is particularly taxing on designers and contractors either. Designers are required to design in ways to minimise risk to workers and to follow-on maintenance, which isn't a bad idea and hardly needs a set of regulations to tell us as much. And contractors have to produce a health and safety file, which it appears can be done for free via the CDM Wizard. For large complex jobs, CDM may come to have a significant role to play. But at the domestic client scale, it's now not far short of being a simple check-box exercise.

Critically, CDM 2015 has replaced the competence tests with something approaching self-certification. If you judge yourself to be competent, than you pretty much are. For the past twenty years, lots of people have made a few quid by acting as professional CDM co-ordinators, often charging a four figure sum for the privilege. So whilst CDM now applies in the domestic building arena for the first time, it's going to be hard for professionals to justify charging such sums for "managing" things that designers and builders should be doing as a matter of course. 

20 Aug 2015

The Post War Housing Boom

In the post war years, we had a housing problem. A shortage even. Lots of people had been bombed out in the war and it was often cheaper to build new neighbourhoods than it was to repair the bomb damage. The governments of the day weren’t hamstrung by self-imposed borrowing constraints so they geared up to the hilt and embarked on a council house building programme the like of which hadn’t been done before and the like of which hasn’t been done since. Britain went a-housebuilding. 

In 1965, which was the peak year for all this, we built 350,000 new homes of which about 40% were council houses, the rest being homes for the private market. In recent years, we have been building a total of just over 100,000 new homes a year (and almost no council houses). 

Some look back on these as the golden age of housebuilding. It certainly was in terms of volume, but what was it that they were building back then? Was it any good? Most people agreed back then that the homes we were building were rather better than the ones people had been used to, which were routinely referred to as slums, but many of the slum houses which survived the clearance programmes have been “improved” and are now the bijou middle class residences worth over a million pounds a pop. Very little built in the 50s and 60s is now worth more than the land it stands on. 

Britain’s post-war housing boom concentrated on results: it was quick and it was cheap but, by and large, it wasn’t really any good. Some council estates have stood the test of time but many descended into virtually unliveable sink estates, or “cities in the sky” where pimps and drug pushers ruled the roost. These days, it’s buildings from the 50s and 60s which are being demolished. Everything built before the war is tending to be lovingly restored.

Is there a lesson to be learned today? We are being exhorted to “build more homes” and housebuilders are being castigated because they are building so little when demand is so high. But are today’s new builds going to stand the test of time? And if we manage to up the numbers we build, will the standards drop? 

19 Aug 2015

Passivhaus: the shape of things to come

Passivhaus aficionados like to make the point that Passivhaus construction doesn’t have to cost any more than “normal” construction. This seems counter-intuitive because the Passivhaus standard demands certain rather expensive features, such as triple-glazed windows, mechanical ventilation with heat recovery and more insulation than you can imagine fitted into places you’d never dreamed of. How can that not cost more to build?

The argument seems to go like this. You learn to work the Passivhaus way and each project you do gets relatively easier and quicker and less expensive. You also learn to design in ways that make it easier to build a Passivhaus and, bit by bit, you close the gap between “normal” build costs and Passivhaus.  Plus there is the added bonus of being able to do without a space heating system or at least a large space heating system, which saves a bit. The argument goes that if all houses were built to Passivhaus standard, within a couple of years the cost premium would vanish. 

But there is a problem with this argument. The physics of heat loss dictate that, for efficiency’s sake, you need to maximise the heated volume and minimise the area of the envelope enclosing it. The heated volume determines what heat you have to deliver and the envelope surrounding it determines how much of that heat you lose. Getting the form right is one of the key determinants of effective Passivhaus design, yet is something that isn’t made explicit.

The most energy efficient shape for a building is a cylinder (it’s why Thermos flasks are shaped that way) but this is impractical to both build and live in. The most sensible conventional shape is a square box, three storeys high. Take a look at the original Darmstadt Passivhaus (pictured) built by Wolfgang Feist. Guess what? It’s essentially a three-storey square box, albeit in a terrace of four — terraces also work well because of the shared party walls. Very efficient form.

Changing a square box into a rectangular box has a small detrimental effect which gets more extreme as you add to the length and shorten the width. Reducing the structure to two-storeys also decreases efficiency a little, but neither of these two measures make a substantial difference.
But certain shapes get severely penalised by this remorseless geometric logic and none more so than single-storey house or extension. Single-storey-anything blows the ratio out of the water as the envelope needed to encase a single-storey structure is usually 30% larger than it is on a two- or three-storey dwelling of the same floor area and therefore the heat loss will be 30% greater. Just because of the shape. You could still build a Passivhaus bungalow but it would require far more insulation, and it would be much more expensive to construct. Consequently, you don’t see many (any?) single-storey Passivhauses.

So when you hear that a Passivhaus costs no more to build than a conventional house, bear this in mind. It may be true, provided you keep the design within certain tight parameters. To put it another way, the Passivhaus standard is either restrictive in what you sensibly can do, or costly to build if you want something that isn’t a plain box-shape.

To be fair, this same rule applies to the building costs of shells generally, not just Passivhaus. But because Passivhaus places so much emphasis on constructing a highly-insulated and airtight shell, it exaggerates the difference.

24 Jul 2015

The death of zero carbon

Since their somewhat surprising election win in May, the Tory government has been getting stuck into some of its bete noirs, or should that be bete verts. They have taken the axe to feed-in-tariffs, to solar farms and on-shore wind, to the Green Deal, to the 2016 zero carbon targets and to any uprating of Part L, the energy efficiency regulations.

Their all too brief explanation is that they consider green subsidies to be too great a burden on consumers and tax payers and that it is good for business and the economy if they are reduced or abandoned altogether. Whilst they are too smart to go on record as saying that climate change is not important, and they are making very supportive noises about the forthcoming Paris Climate Convention, their actions speak otherwise.

For whilst all these green subsidies have their faults, and their critics (I count myself as one), they are all about promoting change in the way we supply and use energy. They are not being improved or refined: they are, bit by bit, being dumped and they are not being replaced. Just about the only coherent energy policy being promoted by the Tories is that we should all get behind fracking.

There are lots of problems with fracking, not least that the people in the shires seem to have even less appetite for it that they do windfarms. Yet the Tories have pandered to the anti-windfarm brigade by withdrawing support for onshore windfarms (the most cost-effective renewable technology), whilst showing no such considerations for similar folk who oppose fracking.

This tells us that the current moves are clearly ideological. The subsidies required to kick start a clean energy revolution are peanuts compared to other areas of government spending and in withdrawing them the government is clearly saying these things don't matter. Their actions would do the Republican Tea Party or Tony Abbott's Australian Liberal government proud. Stick it to the Greens!

So how did we get here? How come the British Conservative response is so different to other European countries, notably Germany which also has a conservative-led administration but one which could hardly have a more different climate policy in place? And what of the Climate Change Act of 2008 which sets out the UK's carbon budgets? Will that soon be repealed?

I've longed nursed a suspicion that the Treasury is a hot bed of sceptics and that Osborne is happy to play along with them. His father-in-law, Lord Howell, is a noted fracking supporter and doesn't appear to like the push for renewables. What do they talk about at the dinner table? And with noted Tory supporters like Lord Lawson, Matt Ridley and the proprietors of the Telegraph, Mail and Times all champing at the bit to dismantle the green subsidies, it was perhaps inevitable that the plug would be pulled.

The Conservative manifesto makes interesting reading here.  It promised to "cut emissions as cost effectively as possible" and not to "support additional and distorting expensive power sector targets." I think "cost-effectively" used here is a smoke-screen for "get fracking" and the "power sector targets" are those set out in the Climate Change Act.

What still appears strange to me is that the whole issue of climate change has become so politicised and that the Right should have come down so strongly against action. There's nothing particularly left or right about environmental protection - it's surely something most civilised countries would wish for. No one is campaigning to re-introduce lead in petrol or asbestos, or for scrapping the Clean Air Act. Admittedly, environmental action is expensive, but then so are pensions and health care and education. What is a state for but to serve our best interests and can it really be in our best interests to do nothing about climate change, to leave it to chance?

The Right questions that the evidence that climate change is dangerous. Whilst this is possible, it is just as likely that the effects will be rather worse than mainstream science predicts. We simply don't know what we are doing to the climate and how it will behave as a result of our using it as a waste dump. But rather than address the issue, the Conservatives seem happy to do nothing at all, hoping that economic growth will sort matters out before too long — for which there is no evidence at all. British climate change policies have never been particularly coherent or logical, but at least we have had some. No longer. It seems we might just as well have elected UKIP as far as climate change policies are concerned.

16 Jun 2015

The Casino Economy

This morning I received an email from Eva Morrison who is a Business Development Manager at Axis Corporate Finance, located in Canary Wharf in London. At Axis, she writes, we assist our clients to find a high yield property, find them suitable finance to complete the purchase and find them professional and corporate tenants to rent the property through professional estate agents who manage the property.

She goes on to state that they have properties for sale from as little as £200k and up to £2m. The yields are 5-8%, the LTV on the mortgage is 75-80% at an interest rate of 3%. Tenants are already waiting.

So let's work out how I could benefit financially from such a deal. I'd need some cash to invest, but in fact it's surprisingly little, only around 20% of the amount the property value. Say I had got £50k to invest from somewhere - I might even have been able to borrow this, but that's another story. I could use this to purchase a £250k property (£50k÷20x100), charge a rent of £16k a year (£250k x 6.5%) and pay interest of £6k (£200k borrowed x 3%). I've no doubt there will be a few charges along the way such as stamp duty, legals fees and management fees, but the bald facts of the deal suggest that, for my £50k investment, I can get a return of £10k per annum, a 20% yield. With a return like that, any uplift in property value is a bonus.

I'm sure it's the way that Buy-To-Let experts tell it and there is no doubt that fortunes have been made doing this. But is it too good to be true? What are the downsides?

The major one is that a borrowing boom like this serves mainly to fuel house price rises. So that whilst I may be happy to pay £250k for a small flat, it's only worth that because the price is being driven higher and higher by other investors trying to latch onto deals like this. Without this great surge of investors, the price would probably be far, far less. The flat itself probably only costs around £80k to build: the rest of the value is quite simply land speculation driven by the market.

Were interest rates to rise (and they have been rock bottom for five years now) or rents to fall, or indeed both happen at the same time, then the squeeze would be on big time.

This sort of property boom-bust is pretty endemic in the UK economy. We have been through three major busts in my life (1974, 1988, 2007) and after each one a period of self-imposed property austerity seems to ensue. But it doesn't last. The animal spirits, or just plain greed, eventually get the upper hand and the up-cycle kicks off again, always fuelled by excessive borrowing. This time it's being fuelled by interest rates which are the lowest ever recorded, making the deals more tempting than normal. Which in itself can only drive prices higher and higher. It's a classic bubble, but it could go on for another ten years — no one knows when it will burst. When the LTVs get above 90%, it's a surefire sign that it's getting too hot. That's when hot money starts chasing gullible borrowers. It's not quite there yet but I don't think it will be far off now.

But there is another social cost which is much less discussed. The people with the £50k to invest are, by and large, the old and the rich. The flats are, by and large, for the young and the poor. Traditionally in the UK, the property ladder has helped the young and poor establish themselves and put roots down into the community. This was one of the cornerstones of Thatcherism.

Although Thatcher oversaw the first wave of council house sales (partly to turn Labour-voting council house renters into Tory-voting ex-council house owners), the Buy-To-Let boom didn't kick off until the Blair years and it's effect has been to reverse the growth of home ownership (down from 70% at its peak in the late 80s to 62% today). Our politicians keep telling us that there is a housing shortage which is stopping the young being able to buy a home of their own. In reality, most of the new homes in the UK today designed to cater for the young are being advertised as investment opportunities sold to older investors who can invariably outbid the young. It's not really a very healthy state of affairs.

Which is a long way of saying to Eva that I won't be taking up her offer to help me find a high-yielding property. I'm sure they are out there and I'm sure that some people will make money out of these deals. But at my age, I don't really need the aggro or the exposure to the risk. And I'd rather my children were able to buy property at sensible prices rather than me buying property at ridiculous prices only to charge them rent in order to live in it. That, to my mind, is bonkers.

26 May 2015

Are Eco Homes prone to Overheating?

Earlier this month, stories appeared in the Sunday Times and the Daily Mail about overheating in eco-homes. In particular, Passivhaus was mentioned.

Why exactly should an eco home overheat anymore than any other home? What the stories implied was that because these houses were so well insulated, they wouldn't be able to cool down in summer. Heavy insulation used to keep the buildings warm in winter also traps heat in summer — potentially putting vulnerable residents at risk warns Mail Online. A study at Coventry University found that Passivhaus flats built by Orbit housing association were overheating too often, although the definition of overheating seemed to be set pretty low at 25°C. Lots of people pay good money to go places where the temperatures never drop below 25°C.

But back to the point. Is there something special about eco-homes (and Passivhaus homes in particular) that causes them to overheat? I don't think so. In fact, the Passivhaus standard is rather unique in setting comfort standards for overheating. 25°C for more than 10% of the time is regarded as a Passivhaus failure but I don't know of any other housing standard where such a result would be deemed to fail. Indeed, the existence of a Passivhaus overheating hurdle was the very reason why this study was being undertaken in the first place.

It's difficult for any home to enjoy temperatures lower than the external air temperatures without introducing air conditioning. Without this, the best method of controlling summer overheating is to open lots of windows and cross-ventilate, so that there is a breeze running through the building. This is the standard house cooling method used in hot countries and there is no reason why it can't be employed in eco homes and Passivhauses. Passivhauses also benefit from having mechanical ventilation systems which, used correctly in heat waves, will contribute to night-time cooling. On its own, mechanical ventilation may not be adequate to dissipate all the heat build up but it's not designed to do this. Passivhauses also have windows!

If the building itself is to contribute to the problem, it won't be the insulation that causes the problem but the thermal mass of the structure. If a house is built largely of concrete or brick, these materials will gradually absorb background heat during a prolonged heat wave and radiate this heat back into the house during the relatively cool night time, precisely when the residents don't want it. Low mass materials like timber and insulation don't absorb significant amounts of heat and are therefore not going to contribute to night time overheating. Admittedly, they will also stop heat escaping from the structure at night but set against this is the fact that they will also stop heat absorption during the hottest part of the day. These two effects cancel each other out.

If there is a problem with overheating homes in the UK, it will almost certainly be caused by a combination of having large, unshaded, south-facing glazing (resulting in the conservatory effect of having spaces which are rendered almost uninhabitable during the day time), coupled with inadequate ventilation — probably caused by having too few opening windows. These are design issues which can affect any building during heat waves, regardless of building standards and insulation levels. The editorial decision by two right-wing papers to big this story up as an "Eco House Problem" is unwarranted and probably mendacious.