The Viability of Architecture in 2014 – 2015 in the UK
This essay examines the financial viability of practising the profession of Architecture in Europe and the UK in 2014 – 2015.
Conclusions are then drawn.
Work Potential
Europe has £1,212,142,696,960 of construction output.
In the UK construction output is £163,948,127,373.
Source: The Architectural Profession in Europe 2014 January 2015
Europe has a total architectural market of £10,854,997,386.
The UK has a total architectural market of £1,441,627,433.
Source: The Architectural Profession in Europe 2014 January 2015
Number of Architects
There are 565,000 architects in Europe including the UK.
Source: The Architectural Profession in Europe 2014 January 2015
There are 34,000 architects registered in the UK.
Source: Architects Journal ‘ARB kicks 2,000 architects off register for non-payment’ 7 January, 2014
Population
Europe has a population of approx.678,000,000 excluding the UK.
The UK has a population of approx. 64,400,000.
Source: Google search
Working Population
There were approx. 242,300,000 persons employed in Europe in 2014
Source: http://ec.europa.eu/eurostat/statistics explained/index.php/Labour_market_and_Labour_force_survey_
(LFS)_statistics#Labour_force_in_the_EU
The total labour force in the UK in 2013 as approx. 32,806,898.
Source: http://www.tradingeconomics.com/united-kingdom/labor-force-total-wb-data.html
Earnings per Architect
The European average earnings per architect before tax was 2907087 EUR, £21,179.33
Less tax = £10,600 = £10,579 x 0.20 = £2,115 = £19,064 post tax income / 12
= £1,588 per month.
Source: The Architectural Profession in Europe 2014 January 2015
In the UK the average earnings per architect before tax was 48 74987 EUR, £35,516.72
Less tax = £10,600 = £24916 x 0.20 = £4983 = £30,533 post tax income / 12
= £2,544 per month.
Source: The Architectural Profession in Europe 2014 January 2015
Minimum wage
The minimum wages in the EU Member States ranged from, £134 to £1,400 per month in January 2015.
Source: http://ec.europa.eu/eurostat/statistics-explained/index.php/Minimum_wage_statistics
The minimum wage in the UK per month was 1,378.87 EUR, £1,004 per month (Jan 2015)
Source: Eurostat
Student Grants and Loans
Allowing for approx. £9,000 per year tuition fees and other costs. Students can have debts of approx. £86,805 to be repaid
Source: http://www.studentfinance.direct.gov.uk
The total repayment on business start up and running costs for a micro architects office can be calculated as £26,250
Source: https://sites.google.com/site/architecturearticles/home/article-101---the-fragile-micro-architects-practice-setup
Conclusions
In percentage of work value per architect the UK is more viable than Europe.
There are a higher potential number of clients in the UK per architect than in Europe.
The earnings, post tax, per architect, are above the minimum wage in the UK and higher than the minimum wages in Europe.
Relating the maximum number of potential clients per architect to earnings potential provides a minimum number of clients needed to make architecture practice viable in the UK.
From 964 people a fee potential of £35,516 would require a spending of £36 per client.
This level of fee involves numerous small projects of approx. 1 hours’ work each for 245 days a year.
It is also to small an amount of fee to cover ongoing life or office running costs.
This indicates that the examined 964 people number is far too large to be representative of the actual required number of people per year to earn the minimum earnings.
From 2 people a fee potential of £35,516 would require a spend of £17,758 per client.
This level of money coming into a practice would be able to cover life and office running costs.
At a rate of 4% fee for architectural work. £17,758 the total project value would be £443,950.
This is approx. 2 new houses.
It can be extrapolated that the actual number of people needed as clients is 2 to break even and 3 to make a profit per year.
In terms of speed of work this would entail 3 projects in 1 year, 4 months work each.
However the approval and construction time would be approx.2 years per house.
Therefore the £35,516 fees are spread not over 1 year but 4 years.
Therefore the minimum number of clients needed is 3 x 4,12, to allow for an ongoing and profitable architectural business at above the minimum wage level in the UK.
The education, business start up and running costs of approx. £113,055 would amount to 3 more years work to be paid off.
A total of 9 years is required to repay education, business start-up, running costs and projects to be financially viable above the minimum wage level per month.
The data for 2014- 2015 therefore indicates an improving work situation for architects in Britain but not in Europe.
From being a student the Architect will be in debt to the value of the original loans and the business start-up loan for approx. 40 years even if the original student loan is repaid or cancelled after 30 years.
The likelihood of students of Architecture setting up and achieving a viable, profit making Micro Architectural Practice is therefore very low.
Even if the repayments of the initial bank loan are spread over 9 years this would leave a profit for the 9 years’ work of well below the national minimum wage or the welfare weekly wage rate.
The data indicates an impoverished profession educated to a high standard but only managing to obtain minimum wage levels of life in 2014 and 2015.
Ian K Whittaker
Websites:
https://sites.google.com/site/architecturearticles
Email: iankwhittaker@gmail.com
13/06/2015
14/10/2020
887 words over 3 pages