Have we finally reached a tipping point when it comes to off-site housing construction?
L&G’s plans for what it claims will be the world’s largest modular housing factory, near Leeds, suggests that if we haven’t, we could fast be approaching one.
The momentum is certainly gathering. A number of players are dipping their toes in the water, including Essential Living and Berkeley Homes. They join long-term advocates such as Urban Splash, which has sold out on its first HoUSe scheme at New Islington near Manchester city centre and has planning consent for two further schemes, at Irwell Riverside in Salford and Smith’s Dock in North Shields, with plans to get to up to 1,000 units a year.
On paper, the case looks pretty compelling. Modular housing reduces the reliance on the supply chain and takes a lot of the risk - and cost - out at a time when one of the biggest challenges facing the industry is construction cost price inflation. Plus, there have been huge advances in technology and materials, which tick the sustainability box - an issue people have lost sight of recently but that has become more important than ever. By taking control of the process, L&G is effectively an insurer taking out insurance against rocketing construction costs.
However, as Urban Splash’s Tom Bloxham told me this week, while there’s a lot of talk, few are walking the walk. He is not convinced we are yet at a tipping point. As he notes: “It takes a lot of time and energy to get the design right. The other issues are the limited manufacturing capacity in the UK, the supply of land and planning, the big one being supply of land.”
Moreover, housebuilders are not exactly piling back in having mostly pulled out in the recession, and they don’t need to when they build so efficiently and cost effectively already. Mark Farmer, chief executive of Cast Real Estate and Construction Consultancy, agrees such methods will never be appropriate for every site. “It depends on size and location,” he contends. “This is more about using a different approach to support additionality of capacity where the model works.”
That said, with the likes of L&G’s Bill Hughes now entering the fray, modular is looking decidedly à la mode at the moment. So even if it is not quite a panacea to the nation’s affordable housing ills, it could at least be part of the cure.
Legends and ladies
It may take a few pioneers to elevate modular construction to the next level. But then, a pioneering spirit is not something this industry lacks, as is evident in our special feature on the late great legends. At this year’s Property Awards, we will be celebrating today’s legends in our new Hall of Fame, as well as the Best Proptech Company - celebrating a potential future legend. It would be good to think that a few ladies will one day be ranked among the best of the best. To mark International Women’s Day, we have devoted the whole opinion section this week to some of the industry’s leading ladies. Enjoy.
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