Building Design Using Cold Formed Steel Sections: Value and Benefit Assessment of Light Steel Framing in Housing

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

Building Design using Cold Formed Steel Sections

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Value and Benefit Assessment of Light Steel Framing in Housing

A L ROGAN BSc, FBEng, PEng, MCIOB, MAPM R M LAWSON BSc (Eng), PhD, CEng, MICE, MIStructE

SCI PUBLICATION P260

Published by: The Steel Construction Institute Silwood Park, Ascot Berkshire SL5 7QN Telephone: 01344 623345 Fax: 01344 622944 In association with Steel Frame Homes Association P O Box 2060 London NW1 5ZP

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

© 1998 The Steel Construction Institute Apart from any fair dealing for the purposes of research or private study or criticism or review, as permitted under the Copyright Designs and Patents Act, 1988, this publication may not be reproduced, stored, or transmitted, in any form or by any means, without the prior permission in writing of the publishers, or in the case of reprographic reproduction only in accordance with the terms of the licences issued by the UK Copyright Licensing Agency, or in accordance with the terms of licences issued by the appropriate Reproduction Rights Organisation outside the UK. Enquiries concerning reproduction outside the terms stated here should be sent to the publishers, The Steel Construction Institute, at the address given on the title page. Although care has been taken to ensure, to the best of our knowledge, that all data and information contained herein are accurate to the extent that they relate to either matters of fact or accepted practice or matters of opinion at the time of publication, The Steel Construction Institute, the authors and the reviewers assume no responsibility for any errors in or misinterpretations of such data and/or information or any loss or damage arising from or related to their use. Publications supplied to the Members of the Institute at a discount are not for resale by them. Publication Number:

SCI-P-260

ISBN 1 85942 093 1 British Library Cataloguing-in-Publication Data. A catalogue record for this book is available from the British Library.

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P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

EDITORIAL PREFACE

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The Government paper Opportunities for Change: Sustainable Construction addresses all aspects of the construction process and seeks to find appropriate solutions for improving the UK construction industry. The housing sector comprises more than a quarter of all UK construction. Any changes that could achieve a 1% saving in construction costs, an objective expressed in the paper, would equate to as many as 2,000 more new homes at no additional expenditure. The achievement of this objective, while maintaining or improving quality, provides the construction industry with a challenge and an opportunity. It is therefore appropriate that this publication, Value and Benefit Assessment of Light Steel Framing in Housing should be issued at this time. In this publication the authors identify the contribution that light steel framing can make to housing construction, in both time and quality, and examine the economic consequences of its use. This study is based on an analysis of a number of constructed projects and compares standard brick and block construction with Surebuild, the light steel framing system produced by British Steel Framing. A financial model determines the ‘value’ of the light steel frame used in these specific projects as a function of the benefits it creates. The publication also identifies the broader implications of light steel frames, particularly in the context of time related savings. The publication is a useful starting point for assessing this relatively new framing material and its potential contribution to the UK housing market. Although light steel framing using cold formed sections has been in use for many years, it is only in the past three or four years that it has begun to be used more extensively world-wide as a primary framing material in both single and multiple family housing. In the United States, according to a market survey conducted in 1997 on behalf of American Iron and Steel Institute (AISI), approximately 60,000 new-build housing units employed light steel framing as a major building component. In the UK, although there are many historical precedents, the light steel framing industry, as it is now understood, is in its initial phase of development with four active manufacturers. These manufacturers are British Steel Framing (Surebuild), Metsec (Gypframe), Speedframe and the Ayrshire Steel Framing/The Forge Company alliance. P:\CMP\Cmp657\pubs\P260\P260-Final.wpd

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The housing products of the four players are remarkably varied, and range from prefabricated frames for the large builder, to low-energy solutions for housing associations, and from one storey bungalows to four storey flats. The longer term opportunity for light steel framing lies in its potential cost advantages, its intrinsic quality and its environmental benefits in terms of adaptability and re-use.

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This publication provides a much needed assessment of the advantages of light steel construction and a method of establishing the value of light steel framing to the developer or builder. Experience has demonstrated that this assessment is difficult, given the established methods of costing housing projects in the UK. Despite these difficulties, the study has established that light steel construction already has demonstrable advantages. More importantly, it has the potential to provide more economic, better quality construction for the UK housing industry, which is emphatically consistent with the Government's objectives.

Sir Kit McMahon Chairman, Steel Frame Homes Association September 1998

HVIJ[ HOVJ[2

V 220 CIV1i 0

Surebuild system

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P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

:1 44 4

Metsec system

._1. .1I

.-.

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-

J) L_._J • I"

The Forge Company/Ayrshire system

:Speedframe system P:\CMP\Cmp657\pubs\P260\P260-Final.wpd

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P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing

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Discuss me ...

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P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

FOREWORD This publication is one in a series entitled Building Design using Cold Formed Steel Sections. It reports on the results of a study into the value and benefits of Light Steel Framing, using the Surebuild system as a case example. The data has been used to create a computer model for real projects, allowing a study of the full financial benefits to be made.

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Other SCI publications in the series are: C

Design of structures using cold formed steel sections (SCI-P089).

C

Building design using cold formed steel sections: Worked examples to BS 5950: Part 5: 1987 (SCI-P125).

C

Building design using cold formed steel sections: Acoustic insulation (SCI-P128).

C

Building design using cold formed steel sections: Fire protection (SCI-P129).

C

Building design using cold formed steel sections: An Architect's guide (SCI-P130).

C

Building design using cold formed steel sections: Construction detailing and practice (SCI P165).

The research was carried out by Mr Alan Rogan, a PhD researcher for The Steel Construction Institute at the University of the West of England, Bristol, using the services of Poole Stokes & Wood. The publication was prepared by Mr Rogan and Dr Mark Lawson, Research Manager for Building and Construction at the SCI, with the assistance of Mr David Philips of British Steel Strip Products. The main contributors to the study and the publication were: C

Maria Anderson and Paul Stanion, Poole Stokes & Wood, Chartered Quantity Surveyors & Cost Managers (Bills of Quantities and Financial Model).

C

Kevin Burnside, University of the West of England, Bristol (Validation of Bills of Quantities and Financial Model).

C

Dr Raymond Ogden, Oxford Brookes University (Thermal and Acoustic advice).

C

Dr Tony Baxendale, University of the West of England, Bristol (Programming, logistics and strategies).

Information was also provided by members of the Light Steel Framing Group, and in particular by British Steel Framing, with contributions from a number of private housing developers. The research involved nine month’s work on site, measuring and evaluating blockwork/timber flooring and light steel construction, as well as an in-depth study of the building process. The work leading to the publication was funded by British Steel Strip Products and was carried out in association with the Steel Frame Housing Association.

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P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing

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Discuss me ...

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CONTENTS

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Page No. SUMMARY

x

1

INTRODUCTION

1

2

USE OF LIGHT STEEL FRAMING 2.1 Benefits of Light Steel Framing 2.2 Value engineering

4 4 5

3

ECONOMIC ASSESSMENT 3.1 Cost assessment 3.2 Financial assessment 3.3 Findings of the economic assessment

7 7 10 13

4

PROGRAMMING AND PLANNING

14

5

THERMAL PERFORMANCE 5.1 Improvement in thermal insulation 5.2 Thermal benefits of Light Steel Framing 5.3 Oxford Brookes demonstration building

16 16 16 17

6

ACOUSTIC PERFORMANCE

18

7

SOCIAL HOUSING

19

8

CONCLUSIONS

20

9

REFERENCES

21

APPENDIX A CASE STUDY SPREADSHEETS

24

APPENDIX B CONTACT INFORMATION

33

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SUMMARY This publication provides information and data on the value assessment and financing aspects of housing construction using light steel framing. It is based on a background study in which a direct comparison was made between the construction and financing costs of houses built with Light Steel Framing (using the Surebuild system) and those built with blockwork walls and timber floors. One part of the study made a detailed comparison between the two forms of construction by drawing up detailed Bills of Quantities. Costs for all items were based on current practical experience and were evaluated for two typical house types. In another part of the study, a comprehensive financial model was developed that can take account of these benefits of LSF in financial terms. This computer spreadsheet model was developed in consultation with a Quantity Surveyor, and derived financial costs, including interest, on a month-by-month basis. The total costs for the two systems were then compared.

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Conclusions from the case study were shown to be: C

The ‘equivalent cost’ of a light steel frame, insulation and floor package is about £7,900 for a typical detached house and £4,500 for a typical semidetached house. This is comparable with actual costs of recent projects using light steel frame packages.

C

Construction periods can be reduced by up to 30%. This leads directly to financial savings.

C

The internal rate of return is improved and turnover can be increased using the same capital

C

Light steel frame construction gives improved thermal performance and leads to savings on heating bills, which could be considered in a whole life cost assessment.

C

Light Steel Framing is less dependent on site conditions and weather, leading to fewer problems for the main contractor.

C

‘Call backs’ arising from shrinkage and other movement effects are eliminated.

Overall, housing constructed using light steel framing offers better quality and additional benefits for both developer and owner/occupier at no extra cost.

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1 INTRODUCTION In the United Kingdom, the housing sector comprises more than a quarter of all construction. Improving the construction process at no additional expenditure has been the subject of government papers, such as Opportunities for Change: (1) Sustainable Construction . Any changes that could achieve a saving in construction costs would enable more new homes to be built for the same cost, or additional profit, or both. (2)

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Light Steel Framing (LSF) meets the aspirations of the Egan Report , which identifies the house building sector as an important area for cross fertilisation of innovation with quality and standardisation. Framed construction is a key to reducing waste, as well as to developing improved processes, thus achieving quality products. In response to targets set by various government sponsored task forces in demanding a reduction in costs and improving quality, research has been carried out at the University of the West of England, Oxford Brookes University, The Steel Construction Institute and British Steel research centres, to identify the potential use, value and benefits of steel framed construction in housing and similar low rise construction. The research was aimed at improving the understanding of light steel frame construction in the residential building sector, through the development of a systems model of procedures and actions. It is expected to encourage and inform the greater use of Light Steel Framing in housing and similar low rise buildings in the UK. Light Steel Framing originates from an industrialised manufacturing sector that typically provides standardised components and which has traditionally been proactive in the supply chain. Standardisation in construction can lead to benefits, provided construction is of high quality and offers a wide range of design opportunities. LSF is one of the closest points of contact between construction and other manufacturing sectors, with the use of standardised products in design, production and erection. Pre-fabricated panels may be erected quickly on site, as shown in Figure 1.1. The potential growth of light steel construction in the UK and elsewhere in Europe could mirror its dramatic increase in the US and Australia where the market share for steel is close to 15%. The most striking benefit of all forms of steel framing is their speed of construction, which leads to savings in site related costs and to greater efficiency of use of working capital. Other benefits include accuracy, reliability and a reduction in the call backs that are prevalent in timber and blockwork construction.

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Figure 1.1 Typical light steel framing using prefabricated wall panels

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The research study indicated the potential to build substantially more houses with the same cash flow. By using LSF in housing development, houses can be built in much less time without increasing site resources, thus freeing capital and finite resources for other projects. The study also showed that general advantages in LSF are obtained through the elimination in shrinkage and movement cracks, as well as greater energy saving, less weather dependence, less reliance on traditional craft labour, reductions in site work, better cost predictability, and a more acceptable product environmentally. These further benefits have not been quantified in the study but may be considered as part of an assessment into the benefits that LSF offers over blockwork construction. In social housing, the increased speed of construction using LSF can give quicker rental receipts, providing economic accommodation more quickly at no extra cost. The better reliability and increased performance reduces risk to the client in terms of future costs. Furthermore, the use of light weight framed construction in “brown field” sites allows the builder the opportunity to develop these sites economically with consequent broader social and environmental benefits. The benefits in the use of LSF for housing vary from site to site depending on the particular criteria and how the builder wishes to exploit them. In some cases the advantages of improved quality (value) are important, whereas in others greater emphasis may be placed on the speed of construction, increased turnover and the improvement in cash flow. A wide variety of construction systems may be adapted from pre-fabricated panels to stick-built construction on site. One such stick-built system using a combination of bolted and screwed connections is shown in Figure 1.2. Although its benefits are not considered in this study, an open habitable roof system can be easily constructed in light steel, creating usable space at modest additional cost. An example of such an application is shown in Figure 1.3.

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_____________

.-.-—.-------—-——

Ii____ TiI1_::I_

4!--

Figure 1.2 Light steel framing assembled on site from individual elements

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I.

-

Figure 1.3 Habitable roof space using Surebuild LSF system

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2 USE OF LIGHT STEEL FRAMING The study examined the potential use of Light Steel Framing (LSF) in housing construction, in comparison with the use of blockwork construction. Five key areas of benefit of light steel framing to the builder and client/user were identified, as listed below. The significance of each will vary in importance depending on the size, location and complexity of the housing project. Further information on light steel construction, and light steel framing in particular, can be found in a number of publications issued by The Steel (3) Construction Institute .

2.1

Benefits of Light Steel Framing

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Benefits may be grouped under five headings. Some have quantifiable cost or financial benefits, some may be evaluated by ‘Value Engineering’. 1.

Speed of construction giving:

C

improved cash flow

C

ability to increase turnover

C

greater reliability of performance to achieve programme completion

C

less affected by variable craft supply

C

less delay due to drying out

C

flexibility in project planning

C

higher internal rate of return

C

savings in site preliminaries (see below)

C

earlier occupancy possible.

2.

Site preliminaries reduction resulting in :

C

less personnel and supervision

C

reduced hire of fencing and site security charges etc.

C

less scaffolding, shorter hire period

C

reduced hire of accommodation

C

reduction in head office overheads.

3.

Site operation benefits :

C

less weather-dependency (decreases ‘down-time’)

C

reduced landfill charges for waste

C

unaffected by shortage of craft trades in inner city or remote locations

C

site looks cleaner to potential purchasers

C

less clean-up costs (due to mixing operations)

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P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing

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Discuss me ...

C

less space for storage required

C

less fork lift use (probably only important on a large site).

4.

Quality benefits:

C

greater use of space ( e.g. open roof system)

C

good dimensional accuracy

C

less damage and remedial work

C

reduced heating bills

C

substantial reduced snagging and call-backs (less cracking of walls etc.)

C

ease of meeting thermal requirements

C

less shrinkage etc.

C

dimensional accuracy allows more cost effective fit out.

5.

Environmental benefits:

C

steel is a recycled material

C

light steel frames are adaptable to future requirements

C

high levels of thermal insulation can be achieved

C

light steel frames provide high acoustic performance

C

construction on brownfield sites or poor ground is economically feasible, because of the light weight of LSF

C

less waste in material use

C

less disruption and noise on site

C

steel does not deteriorate in an internal environment and is inert

C

steel is not susceptible to rot or infestation.

2.2

Value engineering

Value engineering is the systematic application of recognised techniques that identify the function of a product or service, establish a monetary value for that function, and provide the necessary function reliability at the lowest overall cost. A systematic approach to value engineering may be used to quantify the benefits listed above. However, this study has concentrated on the quantification of those benefits that have a direct monetary value by comparing the attributes of LSF and blockwork construction. Other non-quantified benefits may be considered in a broader value engineering assessment including lifecycle costings and business related benefits. In the context of housing, value assessments may be attributed to the: C

developer or builder

C

purchaser or user.

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Often, the builder may be an institutional body such as a housing association, who has a long term interest in maintenance and flexibility of use of its buildings. Therefore, a different level of importance may be attributed to the value of various construction systems as perceived by the builder or client. Furthermore, LSF offers quicker construction and therefore earlier rental or return on investment, as well as better flexibility and utilisation of space. High levels of thermal and acoustic performance can be achieved without adding to cost significantly, as shown in Oxford Brookes University Demonstration Building in Figure 2.1. The following Sections of this publication address aspects of the value engineering assessment of LSF, as viewed by the builder or client: C

Economic assessment

C

Programming and planning

C

Thermal performance

C

Acoustic performance.

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The first two of these Sections present the quantified information from the research study; the second two present data obtained through current research.

I. Figure 2.1 Oxford Brookes University demonstration building using the Surebuild system A prerequisite of these value assessments is the perception of ‘value’ to the developer or to the end-user. From the point of view of the developer, ‘value’ may be quantified in terms of: C

financial benefits arising from speed of construction, leading to greater profitability

C

economy of scale through reduced factory production costs

C

reduction in ‘call-backs’, which is achieved through better quality control and more precise construction

C

less ‘down-time’ due to bad weather

C

less wastage of materials and associated site management.

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3 ECONOMIC ASSESSMENT The detailed study covered the direct comparison of the construction and financing costs of houses and housing projects using Light Steel Framing construction and blockwork construction. Both types of building were assumed to have brickwork facades and have similar internal and external appearance. The study was carried out using British Steel’s Surebuild framing system as an example of modern construction of light steel framing.

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The economic assessment was split into two parts: 1.

The actual costs of using the Surebuild system were compared to ‘Blockwork’ construction as established through an in depth Bills of Quantities. (Cost assessment)

2.

The financial benefits to the user were established through the financial model. These benefits are related to speed of construction and improved cash flow. (Financial assessment)

The quality and environmental benefits as perceived by the builder or user were not included in the financial or cost assessment. (See ‘value engineering’, Section 2.2.) The most important financial aspects of the assessment using the Surebuild system that were quantified in the study were: C

savings in construction time, leading to reduced site preliminaries

C

reduction in financing cost, by earlier return of initial capital.

3.1

Cost assessment

In order to establish realistic costs of LSF construction compared to blockwork construction for two alternative house types, quantity surveyors Poole Stokes & Wood produced Bills of Quantities for blockwork and timber floor construction, and for LSF construction, based on site information and known data. As noted, the Surebuild system was used by way of example. The study involved the production of precise Bills of Quantities incorporating other time-related costs for two house types. One type (Building 1) was a 2 detached house of 133 m floor area, and the other (Building 2) was a semi2 detached house of 77 m floor area. Both were of standard repetitive components with relatively simple plan forms and elevations. Detailed Bills of Quantities were made for every component in a house, including allowance for call-backs. The difference in construction methods and cost for each system was then investigated. Often the variation is small but may be significant when accumulated over a large number of houses in a project.

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This exercise was carried out on site over several months, with the findings then validated by the School of Economics, Faculty of the Built Environment, University of the West of England, Bristol. The results were compared to asbuilt costs of recent projects, by involving major private house developers in the study. The findings are contained in two Bills of Quantities with over a hundred pages of items, ensuring each activity was properly assessed. The research included on-site interviews with sub-contractors, and their data was included in the costing and findings.

3.1.1

The Bill of Quantities for Building 1 2

Building 1 was a two-floor detached house, of 133 m total floor area. The costs for two types of construction methods are given in Table 3.1. Table 3.1

2

Bill of Quantities for detached house (133 m ) Cost (£) Blockwork construction

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Bill Item Prelims Foundations External walls Upper floors Roof-windows Stairs Window and external doors Internal walls and doors Finishes Ceiling finishes Fittings Services Heating/Ventilation Totals

LSF construction (without frame cost)

4,647 5,110 8,931 1,006 4,282 530 1,240 1,927 4,900 1,594 6,116 2,720 1,130

3,560 4,548 4,731 nil 4,245 545 1,257 1,018 4,583 1,768 6,126 2,650 1,230

£44,133

£36,261

In Table 3.1, the cost of building a house using blockwork walls and timber floor construction is the full cost of construction. The cost for the LSF construction represents all the construction elements except for the frame itself. The difference between the two total costs (£44,133 ! £36,261 = £7,872) is termed the ‘equivalent cost’ of the light steel frame; it represents the cost of a frame that would just equate the total cost to that of blockwork construction (in terms of Bill of Qualities items). Therefore, to avoid a cost premium for LSF, the actual construction cost for the light steel framing used in this example should not exceed £7,872. This is consistent with as-built costs of recently-tendered projects of this size. When considering the actual cost of light steel frame construction, it should be noted that the items included in the package for the Surebuild system are: C

wall panels and lintels

C

steel floor joists and trimmers

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C

floor boarding and fixings

C

warm frame insulation

C

wall ties and track

C

damp proof course

C

grommets for service holes

C

frame design service.

In particular, it should be noted that in any comparisons, small items, such as lintels, can be a major part of the cost considerations. Therefore this should be taken into account in broad assessment of costs and savings. 2

The above total cost for blockwork construction equates to £332 per m .

3.1.2

Bill of Quantities for Building 2 2

Building 2 was a pair of two-floor semi-detached houses, each of 77 m total floor area. The costs for a pair of semi-detached houses for the two types of construction methods are given in Table 3.2. Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

Table 3.2

2

Bill of Quantities for pair of semi-detached houses (77 m each) Cost (£) Blockwork LSF construction construction (without frame cost) 9,294 7,119 5,419 4,933 9,944 5,178 1,498 nil 3,147 3,136 545 553 1,200 1,218 1,794 1,818 2,311 1,273 5,920 6,536 1,796 1,958 9,816 9,836 2,120 2,150 1,300 1,340

Bill Item Prelims x two units Foundations External walls Upper floors Roof Roof-windows Stairs Window and external doors Internal walls and doors Finishes Ceiling finishes Fittings Services Heating and ventilation Totals

£56,104

£47,046

In this example, the equivalent cost of the light steel frame is £56,104 ! £47,046 = £9,058, or £4,529 per house. This is consistent with as-built costs of recently-tendered projects of this size. The items to be included in the actual cost of a LSF package, such as Surebuild, are as noted above in Section 3.1.1. 2

The above total cost for blockwork construction equates to £364 per m .

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Figure 3.1 Semi-detached houses similar to those in this study

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3.2

Financial assessment

This part of the study covered the calculation of the financial benefits resulting from the speed of construction, and the effects on working capital. The net saving established the time related savings using light steel frame construction in comparison to other methods. The evaluation was carried out by establishing a computer spreadsheet model that accepts all relevant input data and then determining the consequential financial savings. The financial model was based on the Nationwide Building Society’s quarterly sales data and the Royal Institution of Chartered Surveyors’ indices for regional building costs, giving regional variations. Because builders do not have identical cost or sales figures, the model allowed the opportunity to input data into the model to suit individual circumstances. Allowance was also made in the model for the size of the developer (five alternative groups based on annual construction rate) and developer type (i.e. public or private). For the purposes of the study, the cost base for a typical West Midlands site was 2 used; this was taken as £600/m . For a private developer of ‘group 2’ size (3000 2 to 10000 houses per annum) this reduces to £555/m . (These cost are higher than those derived above for the two house types because the cost base includes items such as roads, services, site overheads, etc. and those items are common to both.) 2)

The sales value used for this region is £150 per square foot (£1610/m ). The interest rate used in the model is 1% over Bank of England base rate for Group 1 developers, rising to 3% over Bank of England base rate for Group 5 developers. (Group 2 was assumed and a rate of 8.5% (7% + 1.5%) was used in the study.) When cash flow becomes positive, interest on money earned is calculated at 3% below the applicable borrowing rate.

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Input and output spreadsheet pages for the two case studies are given in Appendix A. The sheets show further details of costs such as fees, cost of the showhouse, etc. The overall results for the two studies are given in Sections 3.2.1 and 3.2.2 below. The ‘equivalent cost’ of the light steel frame package per unit is that presented in Section 3.1, i.e. £7,872 for Building 1 and £9,058 per pair of Building 2. In the financial model the ‘premium’ (the difference between the equivalent cost and the actual cost of a steel frame) was set at zero.

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1I

Figure 3.2 Completed houses using light steel framing

3.2.1

Case Study 1 - 20 House Development, West Midlands

Case study 1 was for a development comprising 10 houses of Building 1 type and 10 houses of Building 2 type on a building plot of 2 acres. The construction periods were 9 and 6 months for blockwork and LSF construction respectively (see further comment in Section 5). Construction was assumed to start 4 months after procurement of the site. The financial savings resulting from the use of LSF are summarised in Table 3.3.

3.2.2

Case study 2 - 50 House Development, West Midlands

The second case study used the same basic building types as in the first study, but a larger building project of 50 houses (25 of each type). The construction periods were 14 and 9 months for blockwork and LSF construction respectively (see further comment in Section 5). Construction was assumed to start 4 months after procurement of the site. The financial savings resulting from the use of LSF are summarised in Table 3.4.

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Table 3.3

Light Steel Framing financial savings based on zero premium

Benefits of LSF in comparison to blockwork construction Blockwork LSF Difference Other benefits Construction period 9 months 6 months 3 months shorter 33% faster justifies savings on contract preliminaries Development period 13 months 10 months 3 months shorter 23% sooner earlier release of developers’ investment Sales start 7 months 5 months 2 months earlier 29% sooner quicker return on capital employed Profitability £1,661,946 £1,681,977 £20,031 more profit 1.2% higher a benefit to the builder Internal rate of return 177% 252% 74% higher 42% a major benefit to the increase builder Peak cash required £985,481 £923,114 £62,366 less 6% lower a benefit to the builder Average cash £100,109 £4,848 £95,261 less lower borrowing required requirement Turnover using same capital 39% extra ability to expand without (Ratio of dev’t period x peak cash) extra capital The increased profitability can be expressed as £1002 per house (i.e. £20,031 ÷ 20).

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Table 3.4

Light Steel Framing financial savings based on zero premium

Benefits of LSF in comparison to blockwork construction LSF Difference Other benefits Construction period 9 months 5 months shorter 36% faster justifies savings on contract preliminaries Development period 18 months 13 months 5 months shorter 28% sooner earlier release of developers’ investment Sales start 7 months 5 months 2 months earlier 29% sooner quicker return on capital employed Profitability £4,242,582 £4,276,653 £34,072 more profit 0.8% higher a benefit to the builder Internal rate of return 156% 226% 70% higher 45% a major benefit to the increase builder Peak cash required £1,945,280 £1,903,245 £12,312 less 0.6 % lower a major benefit to the builder Average cash £322,310 £421,837 £99,527 more lower borrowing balance requirement Turnover using same capital 39% extra ability to expand without (Ratio of dev’t period x peak cash) extra capital Blockwork 14 months

The increased profitability can be expressed as £681 per house (i.e. £34,072 ÷ 50).

3.2.3

Availability of financial model

Light steel frame manufacturers in the UK now have access to an economic model similar to that used in the research study. Such models allow them to offer house builders and housing associations an accurate assessment of the comparative value of LSF as an alternative method of construction to blockwork walls and timber floor joists. Further details are available from the manufacturers listed in Appendix B.

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3.3

Findings of the economic assessment

In Section 3.1 it was noted that the ‘equivalent cost’ of the light steel frame, insulation and flooring (i.e. cost at zero premium) for the two building types is: 2

£7,872 for the 133 m detached house type 2 £4,529 for the 77 m semi-detached house type. In Section 3.2, the savings in financing cost (or extra profit) were noted as £1,002 and £681 per building for the 20 and 50 house developments, respectively. If the two figures are added together, the total value of the Light Steel Frame becomes: Case Study 1 (20 houses) 2 £8,874 for the 133 m detached house type 2 £5,531 for the 77 m semi-detached house type.

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Case Study 2 (50 houses) 2 £8,553 for the 133 m detached house type 2 £5,210 for the 77 m semi-detached house type. These figures exceed the actual cost of typical LSF packages supplied and erected as part of recent similar sized projects in the UK, and therefore the difference represents a net benefit to the developer and ultimately to the building owner.

;

Figure 3.3 Large residential housing development using LSF

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4 PROGRAMMING AND PLANNING As part of the study, construction programmes were prepared showing the construction sequence using the two alternative construction methods. These programmes were based on the duration of site activities shown in Table 4.1 and on a repeated 8-house cycle, as illustrated in Figure 4.1. This data was supplied by six independent private house builders and the average of the responses was used. The programme shows that better continuity is obtained for the follow-on trades when using LSF. Using two gangs for blockwork/brickwork and one gang for the light steel frame, an approximate completion rate of 2 to 3 houses per month for the blockwork and 4 houses per month for LSF can be achieved.

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For the 20 house development, these rates achieve completion of the construction over a period of 9 months for blockwork construction and over a period of 6 months for LSF. For the 50 house development, these rates achieve completion of the construction over a period of 14 months for blockwork construction and over a period of 9 months for LSF. This indicates a substantial saving of 5 months for LSF. Such time-related savings are applicable to all pre-fabricated systems using LSF. Table 4.1

Duration of typical site activities

Activity

Days st

1. Blockwork 1 lift st

2. Brickwork 1 lift 3. Scaffolding nd

4. Blockwork 2 lift

Comments

1.5

Activity

Days

2

Comments

st

2

concurrent with 17

st

2

concurrent with 18

18. Electrics 1 fix 19. Plumber 1 fix st

0.5

20. Joinery 1 fix

5 8

1.5

21. Plasterer/Dry-line

5. Brickwork 2 lift

2

22. Joinery 2 fix

5

6. Scaffolding

0.5

23. Kitchens

1.5

concurrent with 22

nd

rd

7. Blockwork 3 lift

nd

nd

1.5

24. Electrics 2 fix

2

concurrent with 25

8. Brickwork 3 lift

2

25. Plumbing 2 fix

4

concurrent with 24

9. Scaffolding

0.5

26. Tiles

2

concurrent with 32

10. Blockwork gable ends

1

27. Fireplace

0.5

concurrent with 30

11. Brickwork gable ends

1

28. Mastic

0.5

concurrent after 14 and 15, before end

12. Light Steel Framing

5

29. Artex ceilings

1.5

concurrent with 27

13. Roof trusses

2

30. White goods

1

14. Roof coverings

2

concurrent after 23 before end

15. Brickwork (only for LSF)

5

concurrent after 12, complete by 27

31. Insulation

0.5

concurrent after 21 before end

16. Low level roof

4

concurrent after 14 and 15, before end

32. Decorator

5

17. Windows

4

Only 1 for LSF

33. Handover/ snagging

4

rd

nd

only the frame

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WEEK No. 1 Blockwork Construction Block & brickwork Block & brickwork Roof trusses Roof coverings Low level roofs Fix & seal windows Electric's 1st fix Plumber 1st fix Joinery 1st fix Drylining Tape & joint Joinery 2nd fix Kitchen fit-out Electric's 2nd fix Plumbing 2nd fix Tiles Fireplace Finish ceilings White goods Insulation to loft Decoration Handover/snagging

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

Light Steel Construction Light steel frame Roof trusses Roof coverings Brickwork Low level roofs Fix and seal windows Electric's 1st fix Plumber 1st fix Joinery 1st fix Dryline Tape & Joint Joinery 2nd fix Kitchen fit-out

Legend House House House House House House House House

1 2 3 4 5 6 7 8

Electric's 2nd fix Plumbing 2nd fix Tiles Fireplace Finish ceilings White goods Insulation to loft Decoration Handover/snagging

Figure 4.1

Construction programmes for a project cycle of 8 houses using light steel framing and blockwork construction

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5 THERMAL PERFORMANCE In addition to the financial benefits, clients and users can also benefit from improved thermal performance of Light Steel Framing, leading to reduced heating bills.

5.1

Improvement in thermal insulation

In 1997 the incoming UK government set a national aim to reduce carbon dioxide emissions by 20%. Furthermore, as a result of the Kyoto conference on climate change, the UK Government is committed to cut emissions of the major greenhouse gases by 12% between 1990 and 2010.

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During the NEMEX conference in Birmingham in December 1997, Philip Ward, Director of the Environmental and Energy Directorate at the DETR, identified a number of sectors capable of delivering 55% of the target reductions in energy consumption in the domestic sector, which has a commensurate effect on CO2 emissions if the energy is derived from fossil fuel. Currently, regulations are principally concerned with the thermal performance of the building envelope, as defined by the heat transmittance (U-value) of the components. However, a holistic view of performance may also be established by measures such as SAP ratings etc., which include other energy saving measures.

5.2

Thermal benefits of Light Steel Framing

Light steel framed houses of standard construction provide thermal insulation up to and exceeding the latest Building Regulation requirements. Wall insulation, using either a 35 mm or a 50 mm layer of foil-covered closed cell insulation material is fixed to the light steel frame to create a “warm frame”, avoiding thermal bridging. The layers in this form of construction are (from the inside): C

12.5 mm plasterboard

C

75 mm steel frame with air gap between the steel studs

C

35 mm or 50 mm foil covered close cell insulation

C

50 mm air gap

C

102 mm brickwork.

The total wall thickness of a LSF system is thus typically 275 mm, which is 60 to 90 mm less than the equivalent blockwork construction, thus leading to increased usable space. Buildings with low heat transmission are characterised by a low U-value for the walls and other external components. Air-tightness losses are significant in many traditional buildings and the use of light framing with its impervious insulation can reduce these losses. P:\CMP\Cmp657\pubs\P260\P260-Final.wpd

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This research has not made allowance for the improved thermal performance of the Surebuild system, which, if quantified, would give additional cost benefits and improved life cycle performance compared to blockwork construction.

5.3

Oxford Brookes demonstration building

At Oxford Brookes University, a demonstration building was constructed as part of a European Commission/British Steel funded project. It consisted of a 10 room student residence built using the Surebuild system, and was designed and constructed to provide better energy performance than current best practice standards, using well-insulated envelopes. It has two layers of closed cell 2 insulation, which give a U-value of 0.2 W/m K. Table 5.1 shows comparative U-values that were achieved by this building in relation to current Building Regulation requirements, and current best practice. A current review of Part L of the Regulations is likely to lead to reduced U values, which are easily achieved using light steel framed construction. Table 5.1

Comparison of U values for the light steel frame construction U-Value (W/m K)

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2

Walls

Floor

Roof

Windows

For SAP energy rating of 60 or less

0.45

0.35

0.2

3.0

For SAP energy rating of over 60

0.45

0.45

0.25

3.3

Good practice

0.35

0.32

0.2

2.8

Ultra-low energy homes

0.2

0.2

0.15

2.0

OBU Demonstration Building

0.2

0.35

0.2

1.8

1995 Building regulations:

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6 ACOUSTIC PERFORMANCE Light steel frames have demonstrated good acoustic performance, and do not require inefficient use of ‘mass’ to achieve good sound reduction. The way to achieve good performance is the use of multiple separated layers and with the use of resilient layers in floor construction. Guidance on sound reduction in light steel construction is given in SCI publication Building design using cold (4) formed steel sections: Acoustic insulation . Sound insulation values for airborne sound are compared using the weighted standardised level difference in decibels (dB). The greater the value, the better the level of airborne sound insulation.

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There are no requirements in the Building Regulations for acoustic insulation within dwellings, but the light steel walls and floors perform well with single layers of plasterboard. Between dwellings, high levels of acoustic insulation can be achieved by multiple layers of plasterboard, quilt between the steel member, and resilient bars in the floors to support the plasterboard. Values achieved in the demonstration building at Oxford Brookes University and on site are compared to Building Regulations (Part E) requirements in Table 6.1. Table 6.1

Airborne sound reduction

Airborne sound

Building Regulations: minimum mean value (dB)

OBU Building (measured: mean weighted value dB)

Separating wall

53

65

Separating floor

52

53

It can be seen that the Oxford Brookes building exceeded the Building Regulation requirement for airborne sound insulation by a significant margin.

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7 SOCIAL HOUSING Although the study concentrated on the financial assessments and benefits to developers in major house building projects, there is a strong argument that suggests that Housing Associations and other semi-public bodies take a more holistic view of the general benefits offered by a particular method of building and procurement.

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In this case, the client would put a strong emphasis on: C

reduced maintenance (e.g. no cracking to be repaired, and avoidance of condensation)

C

good thermal insulation, hence low heating bills

C

good acoustic insulation

C

good utilisation of space

C

potential for extendability and adaptability.

Figure 7.1 shows a major housing project under construction that will benefit from the advantages provided by light steel framing. The value assessments are not yet able to quantify these benefits, but from a current study under way at the University of the West of England, Bristol, it is clear there are substantial benefits that, when quantified, will be integrated when assessing whole life costs.

Figure 7.1 Social housing project

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8 CONCLUSIONS

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The following conclusions may be drawn from this study: C

Light Steel Framing offers considerable benefits to the developer or builder in terms of speed of construction, reliability and reduced call-backs.

C

Speed of construction leads to the following potential savings in construction costs: a reduction in preliminaries a reduction in plant usage lintels are incorporated as part of the frame reduction in call backs due to less shrinkage movement.

C

Speed of construction leads to reduced cost of financing, as a result of earlier return on capital and improved cash flow.

C

Light Steel Framing offers benefits to the user or purchaser in terms of freedom from shrinkage and other movements, with high levels of thermal insulation and acoustic performance.

C

A value assessment of the use of LSF will lead to a better appreciation of these benefits.

In the research study, it was demonstrated that the savings in construction costs (of a LSF house, excluding the frame itself, relative to a blockwork house) and the savings in financial costs were as follows: Table 8.1

Summary of economic assessment Building 1

Building 2

‘Equivalent cost’ of frame

£7,872

£4,529

Financial saving

£1,002

£1,002

Totals

£8,874

£5,531

£7,872

£4,529

£681

£681

£8,553

£5,210

Case Study 1

Case Study 2 ‘Equivalent cost’ of frame Financial saving Totals

‘Equivalent cost’ of frame is the difference between the cost of a house of blockwork construction and that of one of LSF construction excluding the cost of the frame itself.

Recently tendered projects using LSF are currently cheaper than these figures, and such savings can be passed back to the client. Overall, housing constructed using Light Steel Framing offers better quality and additional benefits for both developer and owner/occupier at no extra cost.

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9 REFERENCES 1.

DEPARTMENT OF THE ENVIRONMENT, TRANSPORT AND THE REGIONS Sustainable development: opportunities for change - Consultation paper on a revised UK strategy DETR, February 1998

2.

EGAN, Sir John Rethinking construction: The report of the construction task force on the scope for improving the quality and efficiency of UK construction (Egan Report) The Stationery Office, 1998

3.

THE STEEL CONSTRUCTION INSTITUTE (Relevant publications on Light Steel)

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Rhodes, J. and Lawson, R. M. Design of structures using cold formed steel sections SCI,1992 Chung, K. F. Building design using cold formed steel sections: Worked examples to BS 5950: Part 5: 1987 SCI,1993 Lawson, R. M. Building design using cold formed steel sections: Fire protection SCI, 1993 Trebilcock, P. J. Building design using cold formed steel sections: An Architect's guide SCI, 1994 Grubb, P. J. and Lawson, R. M. Building design using cold formed steel sections: Construction, detailing and practice SCI,1997 4.

CLOUGH, R. H. and OGDEN, R. G. Building design using cold formed steel sections: Acoustic insulation The Steel Construction Institute, 1993

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APPENDICES

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APPENDIX A CASE STUDY SPREADSHEETS A.1

Basis of the spreadsheet model

For each study, the model accepts numerous input values that define the size of the development project, the mix of housing, the cost of land, and a basic cost of construction for blockwork. Other factors such as interest rates, fees and other expenses are also entered. If appropriate, a ‘premium’ for LSF can be included, but in the study this was set at zero so that the financial benefits from speed of construction would be isolated. The input data are summarised on the first sheet in each Section (A.2 and A.3).

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From the input data, the cash flow for each type of construction is calculated on a month-by-month basis. Construction costs are assumed to be uniform over the whole development period. Sales revenues commence after the show dwelling has been completed. All these values and a summary of all the expenditure, including interest, are given on separate output sheets for the two forms of construction. The key features of construction and development periods, profitability and cash requirement for the two types of construction are compared on a fourth sheet and the benefits of LSF construction are expressed in percentage terms.

A.2

Case study 1 - development of 20 houses

Input data: page 25 Output data - Blockwork Construction: page 26 Output data - Light Steel Framing: page 27 Comparison of systems: page 28

A.3

Case study 2 - development of 50 houses

Input data: page 29 Output data - Blockwork Construction: page 30 Output data - Light Steel Framing: page 31 Comparison of systems: page 32

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Sheet 1 CASE STUDY 1 - DEVELOPMENT OF 20 HOUSES

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INPUT DATA SCHEME NAME

GOLDEN LANDS

SITE LOCATION

West Midlands

CURRENT DATE

01/10/98

TOTAL SITE AREA

2.00

Acres

DEVELOPABLE SITE AREA

2.00

Acres

LAND PRICE

£

BANK BASE RATE

3

CONSTRUCTION START DATE

4

BASE BUILD COST

£

600

BASE SALES VALUE

£

150

ALTERNATIVE BASE BUILD COST

£

0

ALTERNATIVE BASE SALES VALUE

£

0

LSF PREMIUM PER UNIT

£

1

Months from start

LEGAL FEES ON LAND (as a % of land cost)

1

%

6.0

%

260,000 7.00

SCHEME COMMENCEMENT DATE

MONTH LAND PAYMENT DUE

PROFESSIONAL FEES (as a % of Build)

% Months after current date

MANAGEMENT/DEV. FEES (as a % of Land+Build)

per square metre of build area incl. siteworks and all on costs per square foot

SALES INCENTIVES (as a % of Sales)

per square metre of build area incl. siteworks and all on costs per square foot

SHOW DWELLING (Fit out)

(Input: 1 = selected) SIZE >10000/annum 3000-10000/annum 1 1500-3000/annum 500-1500/annum <500/annum

DEVELOPER TYPE Type 1 Private House Builder Type 2 Public Sector Builder

4.3

%

1

%

REGIONAL LOCATION Scotland Wales Northern North West Yorkshire & Humberside East Midlands West Midlands East Anglia South East London South West

£

30,000

50 50

Blockwork Total Build Cost £ 738,150 427,350

LSF Total Build Cost £ 738,150 427,350

Total Sales Value £ 2,147,418 1,243,242

100

1,165,500

1,165,500

3,390,660

0

DWELLING MIX

Type HOUSE HOUSE HOUSE HOUSE Totals

A B C D

Number

Unit Area Sq m

10

133

10

77

20

Blockwork Current Build Cost £ 73,815 42,735

LSF Current Current Total Build Cost Sales Value Area Sq m £ £ 73,815 214,742 1330 42,735 124,324 770

2100

Percent of Total

1

%

Months after scheme commencement date SALES EXPENSES (as a % of Sales)

DEVELOPER Group 1 Group 2 Group 3 Group 4 Group 5

Blockwork Basic Build Per Sq m £ 555 555

LSF Basic Build Per Sq m £ 555 555

Sales Per Sq ft £ 150 150

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Sheet 2 CASE STUDY 1 - DEVELOPMENT OF 20 HOUSES

OUTPUT DATA - BLOCKWORK CONSTRUCTION

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SCHEME NAME SITE LOCATION

GOLDEN LANDS West Midlands

SCHEME COMMENCEMENT DATE

1-Jan-99

OVERALL DEVELOPMENT PERIOD

13 Months

DEVELOPMENT DENSITY

260,000 Totals £ 3,390,660

INCOME EXPENDITURE Land Legals on Land Building Contract Professional Fees Management/Dev Fees Sales Expenses Sales Incentives Furns/Show Total Interest Total Expenditure

% of Sales % 100.0

260,000 2,600 1,165,500 69,930

PROFIT

1 2 3 4 5 6 7 8 9 10 11 12 13

1-Jan-99 31-Jan-99 2-Mar-99 2-Apr-99 2-May-99 2-Jun-99 2-Jul-99 1-Aug-99 1-Sep-99 1-Oct-99 1-Nov-99 1-Dec-99 1-Jan-00

6 Months

9 Months £

DATE

SALES PERIOD

20 No

CONSTRUCTION PERIOD

CASH FLOW MONTH

7 Months after scheme commencement date

10.00 Per acre of total site area

TOTAL NUMER OF UNITS

TOTAL LAND COST

SALES START DATE

SITE PURCH £ 260,000

% of Build % 290.9

7.7 0.1 34.4 2.1

Per Unit £ 169,533

22.3 0.2 100.0 6.0

4.3 1.0 0.9 50.4 0.6 51.0

12.5 2.9 2.6 146.5 1.8 148.3

7,290 1,695 1,500 85,387 1,049 86,436

1,661,946

49.0

142.6

83,097

SALES EXPENS £

SALES SHOW INCENT DWELLING £ £

CONST COST £ 89,654 89,654 89,654 89,654 89,654 89,654 89,654 89,654 89,654 89,654 89,654 89,654 89,654

PROF FEES £ 5,379 5,379 5,379 5,379 5,379 5,379 5,379 5,379 5,379 5,379 5,379 5,379 5,379

DEV FEES £

30,000 24,300 24,300 24,300 24,300 24,300 24,300

PER ACRE OF DEVELOPABLE LAND PROFIT RETURN % of sales value % cost excluding interest % cost including interest

13,000 130 58,275 3,497

145,798 33,907 30,000 1,707,735 20,979 1,728,714

LEGAL FEES £ 2,600

LAND VALUE

5,651 5,651 5,651 5,651 5,651 5,651

% 49.0 97.3 96.1

£

130,000

BUILD COST / SALES VALUE CASH REQUIREMENT Peak Average Month of Peak Int rate of return

LSF INCENT £

Build Cost per sq m

£555

Sales Value per sq ft

£150

177%

SALES RATE Sales Rate / week.

SUBTOT COSTS £ 357,633 95,033 95,033 95,033 95,033 95,033 125,033 124,984 124,984 124,984 124,984 124,984 124,984

£ 985,481 100,109 6

0.77

SALES INCOME £

565,110 565,110 565,110 565,110 565,110 565,110

SUBTOT CASH £ 357,633 95,033 95,033 95,033 95,033 95,033 125,033 -440,126 -440,126 -440,126 -440,126 -440,126 -440,126

CASH CUMULTIV £ 357,633 452,666 547,699 642,732 737,765 832,798 957,832 517,705 77,579 -362,547 -802,673 -1,242,799 -1,682,925

INTEREST INTEREST INTEREST RATE MONTHLY CUMULTIV £ £ 8.50 8.50 2,870 2,870 8.50 3,543 6,413 8.50 4,216 10,629 8.50 4,965 15,594 8.50 5,638 21,232 8.50 6,417 27,649 8.50 5,422 33,071 8.50 2,304 35,375 8.50 -812 34,563 5.50 -2,511 32,052 5.50 -4,528 27,524 5.50 -6,545 20,979

TOTAL INVEST £ 357,633 455,536 554,112 653,361 753,359 854,030 985,481 550,776 112,954 -327,984 -770,621 -1,215,275 -1,661,946

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

Sheet 3 CASE STUDY 1 - DEVELOPMENT OF 20 HOUSES

OUTPUT DATA - LIGHT STEEL FRAMING

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

SCHEME NAME SITE LOCATION

GOLDEN LANDS West Midlands

SCHEME COMMENCEMENT DATE

1-Jan-99

OVERALL DEVELOPMENT PERIOD

10 Months

DEVELOPMENT DENSITY

5 Months after scheme commencement date

SALES PERIOD

5 Months

10.00 Per acre of total site area

TOTAL NUMER OF UNITS

20 No

CONSTRUCTION PERIOD TOTAL LAND COST

SALES START DATE

6 Months £

260,000 Totals £ 3,390,660

INCOME EXPENDITURE Land Legals on Land Building Contract Professional Fees Management/Dev Fees Sales Expenses Sales Incentives Furns/Show Total Interest Total Expenditure

% of Sales % 100.0

260,000 2,600 1,165,500 59,441

% of Build % 290.9

7.7 0.1 34.4 1.8

Per Unit £ 169,533

22.3 0.2 100.0 5.1

LAND VALUE PER ACRE OF DEVELOPABLE LAND PROFIT RETURN % of sales value % cost excluding interest % cost including interest

13,000 130 58,275 2,972

% 49.6 99.1 98.4

£

CASH REQUIREMENT

130,000

BUILD COST / SALES VALUE £

PROFIT CASH FLOW MONTH

DATE

1 2 3 4 5 6 7 8 9 10

1-Jan-99 31-Jan-99 2-Mar-99 2-Apr-99 2-May-99 2-Jun-99 2-Jul-99 1-Aug-99 1-Sep-99 1-Oct-99

SITE PURCH £ 260,000

145,798 33,907 30,000 1,697,245 11,438 1,708,683

4.3 1.0 0.9 50.1 0.3 50.4

12.5 2.9 2.6 145.6 1.0 146.6

7,290 1,695 1,500 84,862 572 85,434

1,681,977

49.6

144.3

84,099

SALES EXPENS £

SALES SHOW INCENT DWELLING £ £

LEGAL FEES £ 2,600

CONST COST £ 116,550 116,550 116,550 116,550 116,550 116,550 116,550 116,550 116,550 116,550

PROF FEES £ 5,944 5,944 5,944 5,944 5,944 5,944 5,944 5,944 5,944 5,944

DEV FEES £

30,000 29,160 29,160 29,160 29,160 29,160

6,781 6,781 6,781 6,781 6,781

Peak Average Month of Peak

923,114 4,848 5

Int rate of return

SUREBLD INCENT £

£555

Sales Value per sq ft

£150

252%

SALES RATE Sales Rate / week.

SUBTOT COSTS £ 385,094 122,494 122,494 122,494 152,494 158,435 158,435 158,435 158,435 158,435

Build Cost per sq m

0.92

SALES INCOME £

678,132 678,132 678,132 678,132 678,132

SUBTOT CASH £ 385,094 122,494 122,494 122,494 152,494 -519,697 -519,697 -519,697 -519,697 -519,697

CASH CUMULTIV £ 385,094 507,588 630,082 752,576 905,070 385,373 -134,324 -654,021 -1,173,718 -1,693,415

INTEREST INTEREST INTEREST RATE MONTHLY CUMULTIV £ £ 8.5 8.5 3,162 3,162 8.5 4,029 7,191 8.5 4,897 12,088 8.5 5,956 18,044 8.5 4,656 22,700 8.5 975 23,675 5.5 -1,697 21,978 5.5 -4,079 17,899 5.5 -6,461 11,438

TOTAL INVEST £ 385,094 510,750 637,273 764,664 923,114 408,073 -110,649 -632,043 -1,155,819 -1,681,977

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

Sheet 4 CASE STUDY 1 - DEVELOPMENT OF 20 HOUSES

COMPARISON OF SYSTEMS

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

BENEFITS OF LIGHT STEEL FRAMING SYSTEM IN COMPARISON TO BLOCKWORK CONSTRUCTION BLOCKWORK

LSF

9

6

3 MONTHS SHORTER

33% FASTER

JUSTIFIES SAVINGS ON CONTRACT PRELIMINARIES

13

10

3 MONTHS SHORTER

23% SHORTER

EARLIER RELEASE OF DEVELOPERS INVESTMENT

7

5

2 MONTHS EARLIER

29% SOONER

QUICKER RETURN ON CAPITAL EMPLOYED

1 CONSTRUCTION PERIOD 2 DEVELOPMENT PERIOD 3 SALES START 4 PROFITABILITY

£1,661,946

5 INTERNAL RATE OF RETURN 6 PEAK CASH REQUIRED 7 AVERAGE CASH REQUIRED

177% £985,481 £100,109

8 INCREASED TURNOVER USING SAME CAPITAL (Ratio of Dev't period x peak cash)

£1,681,977 252% £923,114 £4,848

£20,031 MORE PROFIT 74% HIGHER £62,366 LESS £95,261 LESS

39% EXTRA

1.2% HIGHER 42% INCREASE 6.3% LOWER

A MAJOR BENEFIT TO THE DEVELOPER A MAJOR BENEFIT TO THE DEVELOPER A MAJOR BENEFIT TO THE DEVELOPER LOWER BORROWING REQUIREMENT

ABILITY TO EXPAND WITHOUT EXTRA CAPITAL

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

Sheet 1 CASE STUDY 2 - DEVELOPMENT OF 50 HOUSES

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

INPUT DATA SCHEME NAME

GOLDEN LANDS

SITE LOCATION

West Midlands

CURRENT DATE

01/10/98

TOTAL SITE AREA

5.00

Acres

DEVELOPABLE SITE AREA

5.00

Acres

LAND PRICE

£

BANK BASE RATE

3

CONSTRUCTION START DATE

4

BASE BUILD COST

£

600

BASE SALES VALUE

£

150

ALTERNATIVE BASE BUILD COST

£

0

ALTERNATIVE BASE SALES VALUE

£

0

LSF PREMIUM PER UNIT

£

1

Months from start

LEGAL FEES ON LAND (as a % of land cost)

1

%

6.0

%

650,000 7.00

SCHEME COMMENCEMENT DATE

MONTH LAND PAYMENT DUE

PROFESSIONAL FEES (as a % of Build)

% Months after current date

MANAGEMENT/DEV. FEES (as a % of Land+Build)

per square metre of build area incl. siteworks and all on costs per square foot

SALES INCENTIVES (as a % of Sales)

per square metre of build area incl. siteworks and all on costs per square foot

SHOW DWELLING (Fit out)

(Input: 1 = selected) SIZE >10000/annum 3000-10000/annum 1 1500-3000/annum 500-1500/annum <500/annum

DEVELOPER TYPE Type 1 Private House Builder Type 2 Public Sector Builder

4.3

%

1

%

REGIONAL LOCATION Scotland Wales Northern North West Yorkshire & Humberside East Midlands West Midlands East Anglia South East London South West

£

30,000

50 50

Blockwork Total Build Cost £ 1,845,375 1,068,375

LSF Total Build Cost £ 1,845,375 1,068,375

Total Sales Value £ 5,368,545 3,108,105

100

2,913,750

2,913,750

8,476,650

0

DWELLING MIX

Type HOUSE HOUSE HOUSE HOUSE Totals

A B C D

Number

Unit Area Sq m

25

133

25

77

50

Blockwork Current Build Cost £ 73,815 42,735

LSF Current Current Total Build Cost Sales Value Area Sq m £ £ 73,815 214,742 3325 42,735 124,324 1925

5250

Percent of Total

1

%

Months after scheme commencement date SALES EXPENSES (as a % of Sales)

DEVELOPER Group 1 Group 2 Group 3 Group 4 Group 5

Blockwork Basic Build Per Sq m £ 555 555

LSF Basic Build Per Sq m £ 555 555

Sales Per Sq ft £ 150 150

1

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

Sheet 2 CASE STUDY 2 - DEVELOPMENT OF 50 HOUSES

OUTPUT DATA - BLOCKWORK CONSTRUCTION

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

SCHEME NAME SITE LOCATION

GOLDEN LANDS West Midlands

SCHEME COMMENCEMENT DATE

1-Jan-99

OVERALL DEVELOPMENT PERIOD

SALES START DATE

18 Months

DEVELOPMENT DENSITY

50 No

CONSTRUCTION PERIOD

14 Months £

INCOME EXPENDITURE Land Legals on Land Building Contract Professional Fees Management/Dev Fees Sales Expenses Sales Incentives Furns/Show Total Interest Total Expenditure

% of Sales % 100.0

650,000 6,500 2,913,750 174,825

PROFIT

DATE

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

1-Jan-99 31-Jan-99 2-Mar-99 2-Apr-99 2-May-99 2-Jun-99 2-Jul-99 1-Aug-99 1-Sep-99 1-Oct-99 1-Nov-99 1-Dec-99 1-Jan-00 31-Jan-00 1-Mar-00 1-Apr-00 1-May-00 1-Jun-00

11 Months

650,000 Totals £ 8,476,650

CASH FLOW MONTH

SALES PERIOD

10.00 Per acre of total site area

TOTAL NUMER OF UNITS

TOTAL LAND COST

7 Months after scheme commencement date

SITE PURCH £ 650,000

% of Build % 290.9

7.7 0.1 34.4 2.1

Per Unit £ 169,533

22.3 0.2 100.0 6.0

4.3 1.0 0.4 49.8 0.1 49.9

12.5 2.9 1.0 145.0 0.3 145.3

7,290 1,695 600 84,487 195 84,681

4,242,582

50.1

145.6

84,852

SALES EXPENS £

SALES SHOW INCENT DWELLING £ £

CONST COST £ 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875 161,875

PROF FEES £ 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713 9,713

DEV FEES £

30,000 33,136 33,136 33,136 33,136 33,136 33,136 33,136 33,136 33,136 33,136 33,136

PER ACRE OF DEVELOPABLE LAND PROFIT RETURN % of sales value % cost excluding interest % cost including interest

13,000 130 58,275 3,497

364,496 84,767 30,000 4,224,337 9,731 4,234,068

LEGAL FEES £ 6,500

LAND VALUE

7,706 7,706 7,706 7,706 7,706 7,706 7,706 7,706 7,706 7,706 7,706

% 50.1 100.4 100.2

£

130,000

BUILD COST / SALES VALUE CASH REQUIREMENT Peak Average Month of Peak Int rate of return

LSF INCENT £

Build Cost per sq m

£555

Sales Value per sq ft

£150

156%

SALES RATE Sales Rate / week.

SUBTOT COSTS £ 828,088 171,588 171,588 171,588 171,588 171,588 201,588 212,430 212,430 212,430 212,430 212,430 212,430 212,430 212,430 212,430 212,430 212,430

£ 1,945,280 -322,310 6

1.05

SALES INCOME £

770,605 770,605 770,605 770,605 770,605 770,605 770,605 770,605 770,605 770,605 770,605

SUBTOT CASH £ 828,088 171,588 171,588 171,588 171,588 171,588 201,588 -558,175 -558,175 -558,175 -558,175 -558,175 -558,175 -558,175 -558,175 -558,175 -558,175 -558,175

CASH CUMULTIV £ 828,088 999,675 1,171,263 1,342,850 1,514,438 1,686,025 1,887,613 1,329,437 771,262 213,087 -345,088 -903,263 -1,461,438 -2,019,613 -2,577,788 -3,135,963 -3,694,138 -4,252,313

INTEREST INTEREST INTEREST RATE MONTHLY CUMULTIV £ £ 8.50 8.50 6,473 6,473 8.50 7,689 14,162 8.50 8,904 23,066 8.50 10,283 33,349 8.50 11,498 44,847 8.50 12,820 57,667 8.50 11,802 69,469 8.50 7,848 77,317 8.50 3,895 81,212 8.50 108 81,320 5.50 -2,488 78,832 5.50 -5,046 73,786 5.50 -7,638 66,148 5.50 -10,197 55,951 5.50 -12,755 43,196 5.50 -15,453 27,743 5.50 -18,012 9,731

TOTAL INVEST £ 828,088 1,006,148 1,185,425 1,365,916 1,547,787 1,730,872 1,945,280 1,398,906 848,579 294,299 -263,768 -824,431 -1,387,652 -1,953,465 -2,521,837 -3,092,767 -3,666,395 -4,242,582

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

Sheet 3 CASE STUDY 2 - DEVELOPMENT OF 50 HOUSES

OUTPUT DATA - LIGHT STEEL FRAMING

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

SCHEME NAME SITE LOCATION

GOLDEN LANDS West Midlands

SCHEME COMMENCEMENT DATE

1-Jan-99

OVERALL DEVELOPMENT PERIOD

13 Months

DEVELOPMENT DENSITY

5 Months after scheme commencement date

SALES PERIOD

8 Months

10.00 Per acre of total site area

TOTAL NUMER OF UNITS

50 No

CONSTRUCTION PERIOD TOTAL LAND COST

SALES START DATE

9 Months £

650,000 Totals £ 8,476,650

INCOME EXPENDITURE Land Legals on Land Building Contract Professional Fees Management/Dev Fees Sales Expenses Sales Incentives Furns/Show Total Interest Total Expenditure

% of Sales % 100.0

650,000 6,500 2,913,750 148,601

% of Build % 290.9

7.7 0.1 34.4 1.8

Per Unit £ 169,533

22.3 0.2 100.0 5.1

LAND VALUE PER ACRE OF DEVELOPABLE LAND PROFIT RETURN % of sales value % cost excluding interest % cost including interest

13,000 130 58,275 2,972

% 50.5 101.9 101.8

£

CASH REQUIREMENT

130,000

BUILD COST / SALES VALUE £

PROFIT CASH FLOW MONTH

DATE

1 2 3 4 5 6 7 8 9 10 11 12 13

1-Jan-99 31-Jan-99 2-Mar-99 2-Apr-99 2-May-99 2-Jun-99 2-Jul-99 1-Aug-99 1-Sep-99 1-Oct-99 1-Nov-99 1-Dec-99 1-Jan-00

SITE PURCH £ 650,000

364,496 84,767 30,000 4,198,114 1,883 4,199,997

4.3 1.0 0.4 49.5 0.0 49.5

12.5 2.9 1.0 144.1 0.1 144.1

7,290 1,695 600 83,962 38 84,000

4,276,653

50.5

146.8

85,533

SALES EXPENS £

SALES SHOW INCENT DWELLING £ £

LEGAL FEES £ 6,500

CONST COST £ 224,135 224,135 224,135 224,135 224,135 224,135 224,135 224,135 224,135 224,135 224,135 224,135 224,135

PROF FEES £ 11,431 11,431 11,431 11,431 11,431 11,431 11,431 11,431 11,431 11,431 11,431 11,431 11,431

DEV FEES £

30,000 45,562 45,562 45,562 45,562 45,562 45,562 45,562 45,562

10,596 10,596 10,596 10,596 10,596 10,596 10,596 10,596

Peak Average Month of Peak

1,903,245 -421,837 5

Int rate of return

SUREBLD INCENT £

£555

Sales Value per sq ft

£150

226%

SALES RATE Sales Rate / week.

SUBTOT COSTS £ 892,065 235,565 235,565 235,565 265,565 291,723 291,723 291,723 291,723 291,723 291,723 291,723 291,723

Build Cost per sq m

1.44

SALES INCOME £

1,059,581 1,059,581 1,059,581 1,059,581 1,059,581 1,059,581 1,059,581 1,059,581

SUBTOT CASH £ 892,065 235,565 235,565 235,565 265,565 -767,858 -767,858 -767,858 -767,858 -767,858 -767,858 -767,858 -767,858

CASH CUMULTIV £ 892,065 1,127,631 1,363,196 1,598,762 1,864,327 1,096,469 328,611 -439,246 -1,207,104 -1,974,962 -2,742,820 -3,510,678 -4,278,536

INTEREST INTEREST INTEREST RATE MONTHLY CUMULTIV £ £ 8.5 8.5 7,153 7,153 8.5 8,822 15,975 8.5 10,490 26,465 8.5 12,453 38,918 8.5 10,674 49,592 8.5 5,235 54,827 8.5 -2 54,825 5.5 -3,521 51,304 5.5 -7,040 44,264 5.5 -10,608 33,656 5.5 -14,127 19,529 5.5 -17,646 1,883

TOTAL INVEST £ 892,065 1,134,784 1,379,171 1,625,227 1,903,245 1,146,061 383,438 -384,421 -1,155,800 -1,930,698 -2,709,164 -3,491,149 -4,276,653

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

Sheet 4 CASE STUDY 2 - DEVELOPMENT OF 50 HOUSES

COMPARISON OF SYSTEMS

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

BENEFITS OF LIGHT STEEL FRAMING SYSTEM IN COMPARISON TO BLOCKWORK CONSTRUCTION BLOCKWORK

LSF

1 CONSTRUCTION PERIOD

14

9

5 MONTHS SHORTER

36% FASTER

JUSTIFIES SAVINGS ON CONTRACT PRELIMINARIES

2 DEVELOPMENT PERIOD

18

13

5 MONTHS SHORTER

28% SHORTER

EARLIER RELEASE OF DEVELOPERS INVESTMENT

7

5

2 MONTHS EARLIER

29% SOONER

QUICKER RETURN ON CAPITAL EMPLOYED

3 SALES START 4 PROFITABILITY

£4,242,582

5 INTERNAL RATE OF RETURN 6 PEAK CASH REQUIRED 7 AVERAGE CASH REQUIRED

156% £1,945,280 -£322,310

8 INCREASED TURNOVER USING SAME CAPITAL (Ratio of Dev't period x peak cash)

£4,276,653 226% £1,903,245 -£421,837

£34,072 MORE PROFIT 70% HIGHER £42,034 LESS £99,527 LESS

42% EXTRA

0.8% HIGHER 45% INCREASE 2.2% LOWER

A MAJOR BENEFIT TO THE DEVELOPER A MAJOR BENEFIT TO THE DEVELOPER A MAJOR BENEFIT TO THE DEVELOPER LOWER BORROWING REQUIREMENT

ABILITY TO EXPAND WITHOUT EXTRA CAPITAL

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing Discuss me ...

APPENDIX B CONTACT INFORMATION B.1

Steel Frame Homes Association

Steel Frame Homes Association PO Box 20260 London NW1 5ZP Tel: 0171 222 4912

B.2

Principal manufacturers of Light Steel Framing in UK

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

Ayrshire Steel Framing (in alliance with The Forge Company) Irvine, Ayrshire KA12 8PH Tel: 01294 274171 British Steel Framing (incorporating Surebuild) PO Box 28 Mendalgief Road Newport, Gwent NP9 2WX Tel: 01633 273642 Metsec Framing Ltd (incorporating Metframe and Gypframe) Broadwell Road Oldbury, Warley West Midlands B69 4HE Tel: 0121 552 1541 Speedframe Ltd 1 St Margaret’s Terrace Cheltenham Gloucestershire GL50 4DT Tel: 01242 690336

B.3

Steel Strip manufacturer

British Steel Strip Products Technical Advisory Service Market Development Commercial Office PO Box 10 Newport Gwent, NP9 0XN Tel: 01633 464646

P:\CMP\Cmp657\pubs\P260\P260-Final.wpd

33

19/04/02

P260: Building Design using Cold Formed Sections - Value and Benefit Assessment of Light Steel Framing in Housing

Created on 30 March 2011 This material is copyright - all rights reserved. Use of this document is subject to the terms and conditions of the Steelbiz Licence Agreement

Discuss me ...

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