Build 75,000 modular homes a year, new report tells government

The government should embark on a programme to build 75,000 modular homes a year according to a report co-authored by the government’s modern methods of construction champion Mark Farmer.

Reports suggest the government is currently considering the proposals, which call for a further cash-injection for the recently launched £11.5bn Affordable Housing Programme in this autumn’s Spending Review.

Farmer told Building’s sister title Housing Today the construction of an “additional” 75,000 homes per year by 2030 could push the use of off-site construction and MMC to a tipping point of wider industry acceptance and move the modular sector beyond its current “cottage industry” status.

The report, which describes itself as a blueprint for a housing-led industrial strategy, is co-authored by Farmer alongside Mike De’Ath, partner at architect HTA, which has designed a number of high-profile modular schemes, including Greystar’s George Street towers in Croydon, the tallest modular buildings in Europe.

Farmer was in 2016 author of the government-commissioned ‘Modernise or Die’ which called for major reform in the construction industry in the face of a deepening skills crisis.

The report is also endorsed by the government’s housing and planning advisor Nicholas Boys Smith, founder of Create Streets, and chair of the government Building Better Building Beautiful Commission, who has written the introduction.

As well as further government cash, the report says the sector needs Homes England to take a pro-active co-ordinating role to broker existing demand for MMC homes across the market, in order that suppliers can be confident of demand, and scale up to meet it.

Farmer said: “The modular sector has always worked as a bit of a cottage industry – there’s massive fragmentation and everyone’s doing their own thing. Government and Homes England need to take a leadership role to aggregate all this, co-ordinating both demand and supply going forward.”

He said this role would go beyond simply setting up a framework, to actively managing the demand for MMC homes, and acting as broker with suppliers. The quango would also drive greater standardisation in the sector, ensuring different systems were interoperable. “Homes England is probably the only party that can be seen as an honest broker for this,” Farmer said.

He said the industry’s production capacity was limited to only around 10,000-15,000 units a year at present, with only 4,000-5,000 of this capacity being utilised, with demand being held back by concerns over the stability of MMC manufacturing businesses and the lack of common standards which would allow another supplier to take over a scheme in the event of a business collapse.

“The primary driver is to make the market more visible to manufacturers, so they can see the level of demand and invest and respond. At the moment those who have factories set up are often under-utilised so they can’t see this demand.”

Farmer said the risk of an imminent market housing downturn meant the government had to act to ensure the uptake of MMC. “If we leave it to open market developers, we are likely to see a reduction. So, this strategy has to be both about making demand visible and increasing real demand via the affordable homes spend.”

The report also calls for the government to focus specifically on rental and discounted ownership tenures to deliver the growth in MMC homes.

The government last week said that development partners in the new Affordable Homes Programme should make 25% of their homes using MMC, and previously set up an Accelerated Construction Fund designed in part to boost the sector.

The report says construction of 75,000 additional MMC homes would create 50,000 new jobs, add 0.75% to GDP and reduce carbon emissions in new homes by up to 40%.