The UK’s modular housing sector has been dealt a blow with the news Legal & General is to halt production of new homes at its flagship modular housing factory in Selby, Yorkshire.
The 550,000 square feet factory opened just seven years ago and had the capacity to build around 3,000 homes a year. L&G has blamed long planning delays, Covid and ultimately a lack of pipeline business, for making running costs at the huge premises unsustainable.
When the factory first opened, there was certainly a buzz around the role it could potentially play in helping the UK meet not only its housebuilding targets but also its energy efficiency goals.
Unlike the ‘prefab’ concrete factory-built homes the UK saw at the end of the Second World War, modern-day modular housing is extremely energy efficient, with most homes holding an A-rated Energy Performance Certificate (EPC).
Costing 55% less to heat than the average UK home and 32% less than traditional new-builds – they can deliver savings of up to £800 a year for a three-bedroomed family home, according to Make UK Modular. Such homes are also 50% quicker to build than a comparative bricks and mortar home.
Manufactured off-site, properties can be fitted with kitchens, bathrooms, electrics and plumbing before being transported via giant lorries to be slotted into their foundations. From one-bedroom apartments to three-bedroom homes, developments also often incorporate affordable homes for shared ownership and social rent.
A report from Make UK Modular last year found the sector had capacity to deliver 20,000 low-carbon, energy efficient homes per annum by 2025. It called on the Government to increase its support for the sector, asking it to fast-track the planning route for modular homes and commit to using modular for 20% of its affordable housing programme.
The UK’s modular housing sector is by no means defeated however by the L&G news. There are currently plans in place for the largest modular housing factory in Europe to be built in Northamptonshire this year, by modular house builder TopHat. The size of eleven football pitches, it will use precision engineering techniques to create up to 4,000 homes per year.
Modular homes have proven to be popular in countries such as Japan and Germany, with Germany housing the Grand Design-esque ‘Huf Haus’. There doesn’t seem any plausible reason modular housing can’t also help in some way to solve the housing crisis here in the UK.
Homes England recently unveiled its five-year strategic plan, offering some hope for the role modular housing might play in the future of housebuilding in the UK. It highlighted the important role Modern Methods of Construction (MMC) could play in revolutionising building, noting there is potential for the technologies and techniques on offer in the MMC sector to meet the challenges facing the housebuilding market.
It stated it would work to increase demand for MMC by incorporating requirements into programmes and contracts. Perhaps in some way, L&G was ahead of its time – arriving a little early to the modular housing party.
The growth of the modular housing market in the UK will require a coordinated approach – something the powers that be have not always been good at delivering. As well as the Government and developers needing to be on board, so too will the mortgage market.
Modular housing is still a fairly new concept for borrowers, lenders and surveyors, and formulating a workable approach to lending and valuing such properties will help bring the modular housing sector into the mainstream.
As with other industries, the housebuilding sector will have to embrace new ways of working, adopting quicker and more efficient housebuilding techniques.
Change will not happen overnight but I do believe modular housing will play a key role in meeting future housing demand. The sector represents a great opportunity for UK housebuilding – let’s hope it doesn’t pass us by.
Simon Jackson is managing director of SDL Surveying
References:
https://www.legalandgeneral.com/modular-homes/
https://tophat.io/news-views/europes-largest-3d-modular-homes-facility-to-be-built-in-the-uk/
