Report: Funding barriers to offsite housing — Separating fact from fiction


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It seems that the whole industry is talking about offsite and modern methods of construction and there is a huge amount of momentum to drive real change in the housing sector.

In the 18 months since our first roundtable examining the challenges faced by those wanting to adopt offsite and modular methods of construction, we have seen the industry take a large step forward in overcoming those obstacles.

One area though that continues to be quoted as a source of concern in both the social housing sector and the private for sale market (as opposed to the private rented sector) is the funding for offsite residential schemes.

There is no doubt that the conversations around modular and offsite methods of procurement are well and truly underway, whilst a huge amount of progress has been made in understanding and resolving the issues preventing wide-scale adoption of this approach, a major issue still cited amongst those involved that is causing concern is how to secure funding for development.

Housing associations and developers often talk anecdotally about funders’ reluctance to fund projects which rely heavily on large elements of the works being constructed offsite. Equally, people have expressed a concern that the traditional house warranty schemes, such as NHBC, Premier Guarantee, BLP and Checkmate, are not suitable for buildings constructed using “nontraditional” methods and that purchasers will have difficulties or a lack of choice when it comes to obtaining mortgages.

However, we have also heard from funders who have suggested that they have no such reluctance to fund and that they are perfectly aware of the challenges and risks of offsite construction and have the understanding and flexibility to address them. This report separates fact from fiction and looks at the perception of funder reluctance from the reality of the market experiences in practice.

Download the full report here.

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