Response to cost study

12 Jun 2018

A recent theoretical study by cost consultant Rider Levett Bucknall UK and written up in The Construction Index suggests that affordable homes made from timber are marginally cheaper than masonry and have a shorter build programme.  Below we highlight key reasons why this study is contrary to what most developers are finding.

For all cost studies, choices needs to be made regarding the selection of a representative specification for the research.  In this study, the specification is not technically realistic and is biased against the masonry option. For example:

• There is no need for a 6mm parge coat on masonry external walls; properly installed plasterboard with a ribbon of adhesive provides a perfectly adequate seal.
• The external wall U-value of 0.19 W/m2K used in the study may be needed for timber frame construction, but for masonry, Part L requirements can be met with a more relaxed U-value of around 0.25 W/m2K when used in conjunction with the masonry sector’s high performance thermal bridging details. This approach also allows a thinner wall construction of 300mm, rather than the more expensive 350mm walls used in the study.

The masonry industry has a full suite of thermal bridging details that minimise heat loss from junctions.  The timber industry equivalent – TRADA - has not published similar details to assist with the reduction of in-use energy and CO2 emissions, hence the reason timber construction requires lower U-values to compensate and help satisfy Part L targets.
The study is limited to terraced housing which is unrealistic, leading to a distorted outcome that favours timber.  Typically, there are constant variances in house types to suit the needs of the planners and urban design, increasing the cost of timber frame homes as a consequence of reduced repetition.
Timber frame also has zero flexibility for changes to the design.  If this is required as the development progresses across a site, the use of masonry will allow the benefit of flexibility to be realised.  Such a cost benefit will not appear in a theoretical cost study, but will do so in reality.
The study appears to ignore lead time, which is much greater for timber construction.  In most cases, it is the overall project period, including the lead time, which is of significance. Whilst theoretically a timber frame build is quicker on site, our understanding from developers is that it rarely results in a reduction in the overall programme length. Consequently, they generally prefer to continue using masonry with all its benefits. 
The study does not take into account financing and cash flow. The short lead time associated with masonry can mean no cash commitment prior to commencing on site.  This is often essential for SMEs and a benefit for larger developers as well.  It is also unclear if site insurance is taken into account, which can require additional measures for timber frame homes due to the increased fire risk during construction.
Finally, evidence from the marketplace suggests a different outcome to this theoretical cost study, with masonry remaining the most cost-effective solution and the dominant method of construction for UK housing. Quarterly NHBC statistics show that timber frame only had 13% market share for the last two quarters, with a downward trend. This represents the lowest timber share of the market for the last 5 years. And looking forward, timber is imported and hence is subject to currency fluctuations, which is a financial risk. 
So, in respect of upfront costs, the theoretical study is not giving the whole picture. Finally, from the homeowner’s perspective, their interest lies in value not cost, with the resilience, robustness and longevity of masonry winning the value comparison.  
Andrew Minson