Let’s be fair, the property market fluctuation is one of the things that affects everyone in equal measure. And, as far as we can see, the prices are always on the rise. A quick glance at the property websites reveals that the capital has seen a dramatic increase in a number of completed luxury flats – too expensive to resolve the rampant housing crisis but too profitable for developers to stop delivering.
Having picked one thick glossy brochure of a new luxury development -printed long before the design stage has completed- one will learn that this dream apartment will be built to the highest specification. Marble tiles from Italy, timber flooring, exclusive paint with an alluring title like ‘Elephant Breath’, luxury designer kitchen and shiny high-end fittings are all a must have when it comes to ‘luxury housing’. The brochure looks convincing enough to get hooked even the most experienced investors, as it should.
Well, it appears that the glossy brochure can turn out to be nothing else but the developers’ wish list, selling you something that simply isn’t there, not even the elephant breath. All thanks to the process cleverly called ‘Value Engineering’. VE is described as “systematic method to improve the “value” of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can, therefore, be increased by either improving the function or reducing the cost.” I think it doesn’t take long to guess what the VE process refers to in this particular case.
Without going into too many details, the Value Engineering (VE) is often a result of incorrect price projection by the developer. In a way, developers are shooting themselves in the foot by rushing with the investment and sales. When all brochures are printed, the investment deal sealed, and a few apartments already pre-sold, developers can ‘surprisingly’ come across unforeseen additional costs. In such cases, the Value Engineering becomes the only way to deliver the project in time and, most importantly, within budget.
What happens after, is that your marble tiles become marble lookalikes, the solid timber flooring becomes an engineered timber board and the Elephant Breath becomes the Dulux paint equivalent with unimaginative RAL code. The fittings are still shiny but produced let’s say in the UK and not in Italy – which is a positive thing in a way, but arguably not what you are paying for. The best part is that the end user has no way of finding out what are the actual materials used. They are designed to look and feel the same.
I would imagine that in accordance with English law one would have the responsibility to inform the end user of any significant changes. But how often do we enter the marketing suite just to find out that the high-end apartment we are about to view is built to a cheaper spec than it states in the brochure? Would you even bother viewing it if you knew it was ‘substandard’ to what you saw in the brochure? Or would you ask for a discount? Some buyers wouldn’t care too much as London property prices are so high. The buyers don’t seem to care about the bubble they are fuelling.
For the sake of the argument, I must say that the extent of Value Engineering varies on every job and your timber flooring may well turn out to be what it says on the tin. But it seems to me more of a lucky draw.
With London property prices climbing steadily up, the capital has already claimed its title of the second most expensive city in the world. In such competitive climate, it is only fair to demand more transparency within the industry and it remains a mystery to me as to why the true ugly nature of VE hasn’t yet been brought to the attention of the end user of effectively addressed by the industry controlling bodies.