Steve Cole, director of Make UK Modular – the trade body for volumetric manufacturers – lays out a strong case for the government to invest in MMC delivery.
Well, that was a busy few weeks.
At Make UK Modular, the voice of the modular housing industry, if we’ve learned one thing in the last month, it’s that housing supply is firmly back on the political agenda.
The government put housing delivery at the heart of its new enterprise zones during the ill-fated mini-budget, while the leader of the opposition has committed the party to boosting both home ownership and affordable housing supply.
The case for market transformation
There is undoubtedly an elephant in the room, however, and that is labour shortages: not lack of skills, not lack of training, just a really, really, simple lack of bodies.
Construction has one of the oldest workforces in the country. More than half of construction workers are aged over 40 and the sector will lose over 500,000 workers (around 25% of the workforce) in the next 10–15 years through retirement alone, a process already well underway. That equates to losing 25% of a workforce that has delivered roughly two thirds of the homes the country needs at fairly undemanding energy and carbon standards.
In essence, UK housebuilding does not have the labour force to even stand still in the next decade, let alone deliver the 300,000 low carbon homes the country so desperately needs.
This labour shortage will hit the development teams at housing associations and local authorities the hardest as volume developers with deeper pockets pick up the best of the diminishing labour market. The fall-out from the mini-budget and its impact on the mortgage market is likely to hit housebuilding hard too.
All this means that, more than ever, we need to focus on market transformation, not squeezing yet more out of an existing system under enormous pressure.
The role for MMC
Our new report, Greener, Better, Faster: Modular’s Role in Solving the Housing Crisis shows that by 2025 the modular housing sector will have the capacity to deliver 20,000 low carbon, energy efficient homes across England. These homes would cost 55% less to heat than the average British ‘bricks and mortar’ family house and be built at twice the speed.
Widescale change in the way in which we build new homes at scale has not been seen in the UK for generations. Technological advances have transformed areas of life including transport, entertainment, retail and consumables, but until recently, housebuilding had been slow to innovate. That is now changing with the advent of a new generation of factory-built homes.
We found that the modular market has matured rapidly in the last 5 years – more than doubling its output despite the Covid-19 pandemic. In 2022, one in every 60 new homes in the UK will be built entirely in a factory – that’s over 3,300 new homes, providing somewhere to live for an estimated 8,000 people. Make UK Modular members (who account for about 70% of the MMC Category 1 market) are on track to expand output by 400% and produce more than 10,000 homes by 2025. Capacity is in place to deliver in excess of 20,000 new modular homes per annum by 2025. This would grow England’s housing supply by 10% and cut the output gap on the government’s housing target by 20%.
What can government do?
Government must capitalise on this investment and capacity because it won’t have this opportunity again. The benefits of MMC have been talked about for some years, and momentum is growing, but there are still barriers which make progress slow and delay the much-needed benefits. Government must accelerate delivery, ensuring the viability of the investment made and the jobs created by removing the remaining barriers holding the industry back. These are moves which can only be delivered by government, and do not require new money:
- Sustainability: Enhance house-building sustainability by introducing a more robust commitment to and targets for net-zero.
- Scale: Dedicate 40% of the Affordable Homes Programme to MMC.
- Planning: Create a national fast-track planning route for net-zero homes.
- Land: Allocate a minimum percentage of the public land bank for modular homes.
- Levelling Up: Create a modular capacity strategy linking new factory location, high housing demand areas, and levelling up priority regions.
Steve Cole is director of Make UK Modular. Find out more here.
19 October 2022
Membership of Building Better is open to any housing association or local authority housing provider in England and Wales.
