The recent news that Goldman Sachs has invested £75m in East Midlands factory-built housing company Top Hat, and that Japanese housebuilder Sekisui House is making its UK debut in partnership with Urban Splash and Homes England, are welcome shots in the arm for the struggling modular housing sector.

Barry Jessup

It will be fascinating to see whether the fresh approaches that these international giants bring will help to overcome the issues that a number of their less well-prepared predecessors have struggled with.

The UK has always been at the forefront of construction and technological innovation – it’s in our DNA – but as we have found, making the seismic shifts that the industry so desperately needs is incredibly difficult. The first steps are easy: we have been using bathroom pods, pre-fab reinforcement and unitised facades for years, and we have always embraced offsite manufacturing techniques; these bring immediate programme and design co-ordination benefits.

But there is a lack of depth in the modular supply chain and this presents serious challenges to wholesale adoption. If other investors follow Goldman Sachs’ lead and help to significantly boost supply, this can only be a good thing.

The UK also poses a number of technical challenges through building regulations and design codes that cannot always be easily addressed through modern design techniques – a classic example of over-regulation stymying innovation rather than encouraging it.


Source: Shutterstock/sculpies

It is to be hoped that Urban Splash’s design excellence and the partnership with Homes England will allow some of Sekisui House’s genuine innovations to work their way through the regulatory minefield.

Sekisui House’s size and balance sheet might also help to overcome the issue of getting a UK contractor to wrap construction innovation into its fixed pricing. Their usual reluctance, combined with a traditional bank’s insistence on a single-source recourse for construction issues, means that genuine innovation is beyond the scope of most small and medium-sized developers.

There is a strong parallel with the broader proptech industry. We have long felt that the technological step changes would arrive from outside the country, outside the industry or, most probably, both. There is so much talent in the proptech sector that it would be criminal if we were unable to provide this talent with the platform to make a real difference in tackling the UK’s housing challenges.

Embracing change

What’s more, we need to be able to demonstrate to young talent that the real estate sector can move on from its Victorian methods and is prepared to embrace change.

Improving the delivery and quality of housing will play a crucial role in solving broader health, education and crime issues. The growth of the build-to-rent sector is providing a unique opportunity to take long-term positions and make equally long-term investment commitments to developing quality housing as part of mixed-use developments. This should in turn allow us to be more innovative in our approaches to delivery. We know that Homes England is a strong supporter.

First Base continues to be committed to construction innovation and is working with some highly creative design partners to help resolve some of these issues. To this end, we very much welcome the additions of Goldman Sachs and Sekisui House to the debate and look forward to continuing to push the barriers together.

Barry Jessup is a director at First Base

  • Mixed-use and modular construction will be among the key talking points at RESI 2019. To join the debate, book your ticket now at