Modular housing 


Share

The UK continues to make considerable progress in adopting modern methods of construction (MMC) in the provision of public and private sector housing. 

The results of a survey by Trowers and debate at subsequent roundtables this year demonstrates that affordable housing providers are now making changes to embrace offsite manufactured housing and that perceived hurdles, such as acceptability of modular housing as security for loan facilities, have been overcome and MMC is viewed as a positive alternative to traditional builds. 

Motivations 

Our survey confirmed that build quality and costs are among the key drivers for using MMC, along with the need for less labour - unsurprising given the industry's skills and labour crisis. Equally, sustainable development and energy-efficient homes are also strong motivators. 

For the affordable housing sector, the attraction of delivering better quality, safer homes with reduced maintenance and energy costs is obvious and these benefits have already been demonstrated by the build to rent sector taking a lead on adopting modular methods for apartment blocks.

The ability for design for manufacture and assembly methods to control and  track the products and materials used in the modular homes means that affordable housing providers can create the golden thread of information about their supply chain and provide information about building safety to residents.

Overcoming the hurdles 

Increased use of MMC is enabling the gathering of data which is essential to demonstrate for new clients and lenders the longevity, maintenance costs and sustainability of the modular homes. Whilst measurement and collation of data is not standardised yet, Homes England are supporting a research programme to align information about modular products to enable clients to make comparisons.

Homes England are also stimulating the market through the requirement to use MMC as a proportion of an overall development (such as the stipulation of 25% of MMC for Strategic Partners). This indicates a step-change in attitudes; however valuers and lenders do need to catch up in order to be able to treat modular housing schemes in the same way as traditional.

One solution to create a blended housing market where traditional and modular are not treated differently is the development of standardised warranties and questions for valuers. NHBC, LABC and BOPAS all offer accreditation for modular manufacturers and established warranties/guarantees backed by reputable insurers provides confidence to funders.  

There are also two key capacity issues to address: Do enough factories exist to deliver modular homes at scale? Secondly, what are the alternatives if a manufacturer goes bust? 

Manufacturers need pipeline consistency and requiring MMC as a proportion of affordable housing builds aids this. Some registered providers have formed consortia to provide this certainty, enabling manufacturers to standardise their products for the group of commissioning clients. 

Collaborative procurement de-risks projects and can provide a safety net if manufacturers get into financial difficulties mid-project. For example, having multiple manufacturers appointed on a framework where products/designs have been standardised could enable another manufacturer to pick up the project and complete the manufacture/installation for the client. 

Learning, experience and standardisation are the keys to wider use across the housing sector. 

Full survey results will be published this summer so watch this space.

Insight

Property litigation weekly update – 24 June 2022

Explore
Insight

"A Fairer Private Rented Sector": What's in the White Paper?

Explore
Insight

Quarterly Housing Update – Summer 2022

Explore
Insight

Aatmay, Rosie and Hannah – How The Chancery Lane Project drafting can bolster green leases

Explore
Insight

Building Safety Act 2022 commencement and timings: what we know so far 

Explore
Insight

Property litigation weekly update – 17 June 2022

Explore