Zoe Owen, partner in the plot sales team at Moore Barlow, discusses how modular construction can unlock the UK’s housing crisis and explains why developers shouldn’t waste any more time to adopt these methods.
Modular construction has the potential to accelerate the delivery of affordable and sustainable housing and adopting Scandinavia’s forward-thinking approach to construction is the key to solving the UK’s current housing crisis.
Against the backdrop of the government’s home building agenda and the ambitions laid out in the Cabinet Office’s Construction Playbook, it is something the entire industry should be paying closer attention to.
It provides cost certainty, saves time and guarantees scales of delivery, yet its adoption in the UK housing market remains low, especially when compared to our European neighbours. Out of the 200,000 homes that are constructed in the country every year, only 15,000 of them are modular.
As the government aims to deliver 300,000 new homes every year, surely now is the time to increase our focus on modular homes?
Mindset change
In recent years there has been a stigma that surrounds modular housing, with some believing it resembles the low-build quality of prefabricated homes of the 1960’s. However, that is starting to shift and today modern methods of construction produce high-value and cost-efficient homes.
Despite this, there is still a reluctance from developers to adopt such methods – both from a practical and financial perspective.
It is often misunderstood that the design and build of major housing projects falls under one single contract, where the lead contractor sub-contracts elements of the work to SMEs across the supply chain. However, this approach changes when it comes to offsite construction and an element of risk is introduced given the work will likely be completed by one-subcontractor. This requires a large upfront investment to help fund material costs and could well be the factor that is holding back getting spades in the ground on large-scale modular housing schemes.
Ultimately it comes down to a change of mindset. The construction industry remains at the forefront of innovation, but it can be risk-adverse when it comes to widespread change. The public sector is leading the way and bringing longstanding traditional practices up to date, but there’s still a long way for the rest of the property industry to go and large developers need to take note.
Why wait?
From a legal perspective, there isn’t a vast difference between developments built through traditional methods and those that utilise modular construction. But, for those purchasing modular properties, they aren’t too dissimilar to traditionally built homes. In fact, we’ve seen very little push back from buyer’s lawyers when it comes to build quality or restrictions for homeowners – something which is supported by the seal of approval from the NHBC.
BoKlok UK’s step into the UK housing market could pave the way for others to follow. A 50/50 joint venture company between global home furnishings brand IKEA and Skanska, one of the world’s largest project development and construction groups, BoKlok uses modern methods of construction to design and build innovative, environmentally sustainable homes. Construction work on the company’s first UK development is underway in Bristol and Moore Barlow has been appointed to carry out the legal work involved in selling the new plots at this and future sites.
Funding
UK housebuilders and their funders are cautious of being overdependent on modular construction, which is partly due to upsetting the status quo and a lack of experience when it comes to large-scale developments – which can often deter them from lending considerable sums of money towards off-site projects.
Off-site construction also brings with it an element of risk for lenders, particularly with the start-up costs associated with the establishment of offsite factories that cannot necessarily be closely controlled.
In short, modular construction will play an increasingly important and innovative role in the future of housing development. As we move towards a sustainable future and strive to hit the UK’s net zero goals, modular has to be considered more valuable across the sector.
How important and ground-breaking a role it will play remains to be seen, and all eyes are on those developers who are willing to embrace change and adopt a modular future.
ENDS
