It involves the use of discounted flow techniques to establish the true cost of a building over time – both capital and revenue costs. It ensures that the owner of a property is fully aware of the costs that a building is likely to generate throughout its entire life, which, for investment purposes, is generally accepted as 60 years. It also enables the owner to set up a sinking fund to provide for future costs.
Is it taken into account in the social housing sector?
No. Social housing is almost entirely financed through public funding yet the financing regime concentrates on capital cost and avoids issues relating to lifetime costing. This results in underfunded maintenance budgets and explains the backlog of repair works.
The increase in housing provision proposed by government initiatives will increase the burden on revenue budgets for which there will be insufficient funding.
So far, in its rush to provide new sustainable communities, the government appears to have no proposals to reconsider the basis of funding affordable housing so that lifetime costs are taken into account.
Why is it important?
The government is keen to create low-cost, but not low-quality, affordable housing. It is also trying to create sustainable communities, which means high-density housing, preferably mixed-use, built on brownfield land and affordable to key workers. Such developments require a high level of maintenance and it is likely, on a per-unit basis, to be more expensive than less dense developments. This is a long-term strategic issue because it forms a revenue charge to public housing providers.
A higher initial capital cost can result in a lower whole-life cost. This is why the future maintenance requirements and consequent costs for the dwellings and the environment must be considered at the outset and is a key issue in creating sustainability.
What key factors affect life-cycle costs?
The cost of maintenance of housing developments is critically influenced by decisions taken at the design stage. The designer must create a vibrant, sustainable and safe community, a built environment that satisfies design aspirations and future use patterns, and a building that can be maintained at an affordable cost.
The materials chosen for the development should have little or no maintenance requirements. Preference should be given to products where supply chain agreements can be set up so that replacements are easily available.
For internal elements that will require replacement or have low-life expectancy, standardisation should be a priority.
As part of the scheme design and approval process, a planned and reactive maintenance programme should be established by the landlord responsible for the housing.
What is the future of lifetime costing?
The high-density concept that forms the central part of the government initiatives will require a high standard of maintenance to ensure developments do not become run-down. This will lead to further emphasis on lifetime costing and its financing.
The move towards developing non-traditional forms of structure which can be produced off-site, such as modular and volumetric, may have high life-cycle costs if components become unavailable or are difficult to replace.
Items such as fully finished bathroom pods, although low in defects, are likely to have extremely high replacement costs unless attention is given to this at the design stage. The same will apply to many proprietary products incorporated into more innovative designs.
Windows
Timber
Achieves greater durability and is usually guaranteed to be protected against rotting for 30 years. However, it needs repainting regularly and this can involve extensive scaffolding.
Aluminium and PVC
Their use in housing is comparatively recent and their true lifespan may yet need to be established. Modern products will stand the test of time but there are some early examples of mill finish aluminium and UV-sensitive PVC windows that have needed replacement earlier than anticipated.
External Walls
External walls and their finishes are the most critical element when determining lifetime costs, and low maintenance products are essential if future revenue costs are to be affordable.
Brick
External brickwork should be in quality stock bricks as the use of poor bricks leads to irreparable deterioration of the fabric – this also looks bad. The difference in capital value between a quality and a poor brick over the cost of a semi-detached house is negligible.
Sheet cladding/curtain walling/rainscreen etc
These require careful detailing and manufacture and must be expertly installed to ensure satisfactory long-term performance. However, they are prone to damage in exposed areas and can be expensive to repair. Cleaning must also be carried out regularly.
Acrylic-based insulated render
This promises to have a long service life and to be relatively maintenance-free, but if it is installed in areas where there is public access, it can be subject to damage which is costly to repair. After a period of years it may also need to be cleaned and redecorated.
Roof
Roof types are often determined by the building form but are a key factor affecting the lifetime costs of a building.
Tiles
and slate Low-rise housing is likely to have a pitched roof and, providing the materials are of a good quality, these roofs are likely to have a life of 60 years with little maintenance.
Asphalt, polymeric and sheet metal coverings
High- and medium-rise developments tend to have flat or vaulted roofs with asphalt, polymeric or metal coverings. The materials needed for these types of roofs require careful detailing, expert installation and usually need regular maintenance followed by replacement at between 20 and 30 years.
Services
Heating, which is likely to be either electric or gas-fired, contributes heavily to both running and maintenance costs.
Electric heating
Although it suffers from a higher running cost, it has a significantly lower capital cost, requires little maintenance, often enjoys a longer life than traditional gas systems and is simple to replace. It is also suited to smaller, low-occupancy households, which are those in highest demand.
A key design issue in reducing lifetime costs is ensuring that pipes and cables are easily renewable.
Kitchen and bathrooms
Kitchens and bathrooms will generally require replacement after 15 and 20 years respectively.
However, both are subject to high costs during this period due to the replacement of damaged parts. To reduce lifetime costs, it is essential to choose components that will be replaceable and that manufacturers will guarantee availability of their product.
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