Modular still has a crucial role to play in building our way out of the housing crisis

The recent news that L&G have taken the tough decision to cease production at their modular housing factory in Sherburn in Elmet (pictured) is a stark reminder of the difficulties faced by modular housing companies that are pioneering the transformation of housing delivery in the UK.

For many, there will be a lack of surprise, and it may encourage others to quietly shift their focus back to traditional construction. However, modern methods of construction (MMC) and modular remain a crucial component for housing as it grapples with climate change and a declining construction workforce.

It is important to note two things. First, modular housing is not failing, quite the opposite, with thousands of new homes being delivered each year using this method of construction. Second, this setback is a microcosm of the operating environment facing our entire sector, which is the lack of enablement of a steady long-term and visible level of demand for new homes across asset types.

Modular housing as a proven system and product is not in doubt. At HTA Design, we have designed and facilitated delivery of well over 7,000 homes of varying types and scales with volumetric modular manufacturers. As ‘designers in industry’, we are particularly proud to be associated with such fantastic buildings as Greystar and Henderson Park’s Ten Degrees, the world’s tallest residential modular building in Croydon, and to be working with manufacturers in delivering several thousand new homes throughout the UK.

These schemes demonstrate that, in the toughest of environments, it is possible to deliver the scale and quality of homes to match local needs. However, others struggle to match these outcomes, which begs the question: is it possible to envisage a future where modular delivery is mainstreamed to act alongside traditional construction?

At HTA, we offer wide-ranging advice to private and public sector developers and house builders to help them understand what is required to facilitate great modular outcomes. Currently, there is often inconsistency and transactional use of modular systems and products in the construction process, rather than end-to-end engagement, which inevitably leads to outcomes that do not meet expectations, perpetuating preconceptions regarding further commitment to its use.

No comparison with car manufacturing

What would lead to better, more consistent outcomes would be a long-term, stable political and economic climate for all modes of delivery. However, certainty is even more important for manufactured housing.

It is wrong to compare modular housing to car manufacturing. Building a home is nothing like building a car. Modular manufacturers are effectively undertaking large parts of their R&D in full public gaze and with the support of outside investment, whereas car manufacturers have the luxury of huge investment in developing a product away from public view before bringing it to market. Even then, we know defects occur and call-backs happen. This is all the more reason to celebrate and support modular manufacturers.

Alternative assets provide stable demand

Modular housing’s future is bright where it aligns with the growth of income-based delivery models, such as build to rent, co-living, social housing, student accommodation and hotels. They have the benefit of quicker absorption, and a steady state pipeline for manufacturers to prepare to deliver. Moreover, the aggregation of pipelines to create multiple project opportunities that are linked together through mechanisms such as the FAC-1 Framework Alliance Contract can transform speed and quality in delivery. The benefits of faster delivery and occupancy in turn accelerate placemaking across significant plots, as demonstrated at Greystar and Ivanhoe Cambridge’s Greenford Quay, where 2,000 homes are almost halfway to completion in five years, with those built fully occupied.

To replicate this requires enlightened clients that align their business, procurement and development approach. Continual regulation changes and planning, of course, also frustrate the smooth transition from design to planning to manufacture to delivery.

In our 2020 report ‘Build homes, build jobs, build innovation’, Mark Farmer and I saw the risk of a decline in house building, which was already at a low ebb in the face of Covid. Now we are seeing the severe economic impact of interest rate rises and cost-of-living increases further undermining confidence, not helped by a political hiatus in the support for housing delivery.

Housing cannot be ignored for long. We already have a dramatic under supply of social housing, increasing housing lists and urgent demands to revitalise city centres with affordable housing. Modular remains untapped for many local authorities, which have a huge opportunity to scale up to make inroads into the 4.5 million home shortfall we have currently accumulated over the past 30 years. This is now surely part of the UK’s infrastructure deficit and should be seen as such by the Treasury.

Ultimately, modular construction has to be part of the solution to the housing crisis, particularly for its low carbon credentials. Research conducted by academics from Cambridge University and Edinburgh Napier on two HTA-designed modular buildings showed that construction using modules made in a factory can produce significantly less CO₂ than traditional methods for building homes. The carbon emissions were dramatically lower because modular buildings require less volume of carbon-intensive products such as concrete and steel. This is even before we have less waste, less transport and fewer people working on site.

As the UK seeks to raise productivity and build homes while reducing our carbon footprint, I remain absolutely convinced that modular housing has significant place in housing delivery.