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16 October, 2021
One lasting legacy from the pandemic will be the switch to online purchasing. As a nation we have all become far more comfortable with making purchases online before we have seen the goods.
Now imagine extending that online shopping habit to buying a home – where you choose the layout and the décor from the comfort of your own home for it to be then manufactured and delivered in modules where you want it.
It might sound crazily futuristic, but choosing your own home in this way is all part of a new industrial revolution according to the government.
The approach is called Modern Methods of Construction (MMC), a term that encompasses approaches to housebuilding that are quicker and more efficient, and importantly where many of the components are fabricated offsite.
MMC might be a relatively new phenomenon in the UK, but countries around the globe have been benefitting from it for years. Japan leads the way having first embraced MMC 50 years ago, Tokyo has the capacity to build more houses per year than the entire UK.
Elsewhere, Sweden is building at least 45% of new homes off-site in factories, China has set a target that 30% of all new buildings will be constructed off-site by 2026 and Singapore requires all development on government land to use modular construction.
So, with the UK failing to meet its 300,000 new homes a year target, MMC could be a critical part of solving the UK’s growing housing crisis. To that end the government has even appointed an MMC champion, Mark Farmer, who has responsibility for developing the safety, quality and potential of the industry, which will be worth £40 billion a year once mature.
A report by Farmer recommended that the government should set a target of 75,000 modular homes by 2030. The report say modular housing is ‘the biggest single gamechanger’ when it comes to adding to the country’s housing supply.
The government is also putting strong financial commitment behind MMC. To date more than £233 million of loans have been agreed for MMC projects by the government’s Home Building Fund.
And as part of the March Budget, the then Ministry of Housing, Communities and Local Government announced plans to launch an MMC taskforce backed by £10m of seed funding.
The government has also made MMC a condition of its strategic partnership grant programme, with all strategic partners expected to deliver a minimum of 25% of homes through MMC.
Alongside this, Homes England has also commissioned a significant research programme to evidence the impact of MMC within the housing sector across eight pilot sites, totalling approximately 1,800 homes.
It’s hoped that the evidence of the benefits of MMC use will provide greater confidence to the industry, investors, insurers and customers to support its use across the sector.
The increased focus is understandable. MMC can deliver high-quality housing at pace and according to the government it has been shown that some homes built using MMC have 80% fewer defects and can reduce heating bills by up to 70%. Some of the main benefits of MMC housing include:
Buyers should also not be concerned about quality as modular homes are built to last the same amount of time as a traditional property.
The new industrial revolution
It is in the North of England where the most exciting innovation in MMC is taking place, in a so-called ‘Northern Construction Corridor’ with digitally designed houses where the computer code feeds directly to the production floor, and the best automation and assembly-line production techniques.
This industrialisation of housebuilding offers a unique opportunity to drive affordability into the sector which can then, in turn, be passed on to the house buyer.
Economies of scale mean that the bigger the orders placed with modular businesses such as this, the better they are able to plan ahead and price competitively.
This means that in the long-term, MMC can be a large-scale solution for every tenure: social housing, home ownership, build to rent and market sale.
One unlikely advocate of MMC is financial services provider Legal & General (L&G) who have created their own modular homes business and factory in Sherburn, Yorkshire. L&G has assembled a team of people with experience in sectors ranging from housebuilding and land development to aerospace and engineering.
Its latest project in Bristol will create 185 new homes in conjunction with the City’s council. Once the land has been cleared and prepared, the homes can be assembled on site within eight weeks.
The Bristol scheme will create some of the most energy efficient homes in the country with all homes achieving an energy performance certificate (EPC) standard A. The combination of Air Source Heat Pumps, Photovoltaic Cells and high-quality build standards will put them in the top 1% for energy performance meaning significant energy savings for its residents. 50% of the homes will be delivered as affordable housing.
It’s clearly a growing business as Legal & General Modular Homes is currently looking to hire an additional 350 employees into the business this year.
And in a sign that the UK has started to make its presence felt on the world stage, Croydon become the proud home of the world’s tallest modular building this year, just 35 weeks after construction started. The two towers of 101 George Street, developed by Tide and its sister company Vision Modular Systems in its Bedford factory, stand at 44-storeys and 135.6m. It is the tallest modular apartment tower in the world – the same height as the London Eye.
MMC will play a major role in the future of housebuilding. There is no reason to shy away from properties constructed in non-traditional ways and those who set the standards as well as those who lend against them and those who insure them are working together closely. Conveyancers are making sure they know about these new forms of building from the outset so they can make sure buyers understand the implications.
MMC projects are now well under way in the UK, and you can expect to see one coming to a town near you soon.