The benefits and barriers to modular housebuilding outlined in a new report

A new report looks at what is holding back modular housebuilding, and why changing this is essential for the sector and the wider UK economy.

The report, Deploying modular housing in the UK: exploring the benefits and risks for the housebuilding industry, is a collaboration between property development and management business Places for People and the University of Cambridge’s Centre for Housing and Planning Research. It looks at the current context for modular construction, the potential benefits and opportunities as well as the barriers that continue to hold back large-scale adoption. It also provides recommendations for how greater uptake of these techniques can be encouraged.

Although not the first publication to assert the benefits of modular techniques and MMC, this report highlights how it can help solve some of the most current and pressing issues for the UK. This includes the need to reduce embodied and operational carbon emissions, make homes genuinely affordable and reduce regional economic divisions. It also highlights how the shift in skillset and working patterns that would accompany widespread MMC adoption could drive recruitment in construction and create a more diverse workforce. It notes further that new approaches could help solve the shortages of skilled labour in the sector that will only worsen in the coming years if not addressed.

The challenges identified by the report result from a range of interlinked factors. These include high investment costs, an absence of conclusive evidence about the benefits, logistical issues and an MMC skills gap, as well as a risk aversion among insurers, lenders and housebuilders themselves. This is compounded by the lack of demand from consumers, partly due to the negative perceptions that have persisted for decades due to the reputation of poor quality, post-war ‘prefab’ houses.

Among the key messages of the report is that addressing some of these issues will help solve others. For example, the report notes that without a stable pipeline of demand, factories cannot operate at a financially viable capacity and therefore developers are not seeing the full speed and cost benefits.

Key recommendations from the report include:

• Creating incentives, both financial and planning policy based, such as government grants, tax breaks and subsidies as well as ‘fast-tracking’ of planning permission for modular housing.
• Establishing a stable pipeline of demand to ensure the market absorption of new homes and to maintain the viability of offsite factories.
• A clear and coherent set of standards and regulations to mitigate risks and provide certainty and confidence for clients, consumers, lenders and insurers.
• Systematic data collection to create a strong evidence base of the benefits of offsite housing construction and MMC.
• Retraining schemes and education programmes should be established to ensure the industry’s workforce has the necessary skills for modular housing.
• Local authorities should ensure that government recommendations are supported at the local level.
• Development of a standardised ‘kit of parts’ to be used across the industry by different manufacturers to overcome the problem of interoperability between different components.
• Sharing learning about modular housing and establishing initiatives to promote collaboration within the housebuilding industry and the wider construction sector.

Housing delivery continues to be a key issue for the industry but MMC has the potential to achieve what is needed. This report highlights the challenges, and what can be done to help solve these issues.