Too many housing associations are reluctant to share information with development ‘rivals’ but trust and co-operation is vital to make MMC widespread in affordable housing, writes Jake Snell
A competitive culture is the norm in housing development, but in social housing – where the focus is people, not profit – transparency and collaboration are vital.
Nowhere is this more important than offsite. Several decades ago, local authorities and housing associations tried to build homes in factories, and it didn’t end well. Modern methods of construction (MMC) gained a reputation for being risky, expensive, and fraught with maintenance headaches. Since then, most schemes have remained small scale.
Nowhere is this more important than offsite. Several decades ago, local authorities and housing associations tried to build homes in factories, and it didn’t end well. Modern methods of construction (MMC) gained a reputation for being risky, expensive, and fraught with maintenance headaches. Since then, most schemes have remained small scale.
Over recent years, work has been done to rebuild confidence in what is still a relatively nascent marketplace.
Procurement routes have been strengthened, with complex tender exercises streamlined and quality assurance standards introduced.
MMC factories have invested in production techniques, training and logistics. Significant levels of scrutiny have been introduced, increasing quality and reducing future repair bills.
Financing, too, has improved, with some lenders – who would only secure 10% of a social housing provider’s portfolio three years ago – now accepting 20%. I’ve heard of one lender who is willing to accept 50%.
Despite this headway, widespread use of MMC in social housing just hasn’t arrived.
One reason, I believe, is limited information-sharing. Prompted by an urgency to deliver extra affordable homes and meet tough house-building targets, many housing associations remain guarded about the prices they pay for offsite projects, believing that if they reveal figures, another provider might make a lower bid for the same site.
This lack of transparency means that a large proportion of my sector still thinks offsite costs more than it does. There just isn’t enough live data on MMC build or asset management outlays for organisations to see it as viable.
The same culture affects some manufacturer relationships. In traditional construction, housing organisations are often hesitant to reveal scheme budgets, worried that contractors will work to that number.
We’ve all experienced contractual and financial challenges on site and it isn’t always easy to share figures. But to create a shift to collaboration, we must all act differently, particularly with offsite where the dynamic is different.
These are manufacturing deals, not construction deals, and costs are fixed and transparent – we already know what an offsite home will cost above ground. The more honest a housing association or local authority can be about their budget, the faster a manufacturer can confirm whether a site is viable.
Ingrained behaviours take time to change, and this challenge is now being taken on by 30 social housing organisations who are determined to normalise – and open up – MMC.
The Building Better alliance was set up in 2018 as part of the National Housing Federation’s Greenhouse innovation programme. Research from this programme indicated that historically, different social housing providers made the same mistakes around MMC.
There was a nervousness about trying out what felt like an unfamiliar, uncertain form of house-building and people spoke about offsite being ‘baffling’ with a ‘plethora’ of suppliers and categories.
That’s why sharing knowledge and data around MMC is so important. Providers must feel they are not alone, and they can learn from other like-minded organisations who are being candid about what went well and what didn’t.
Openness is so crucial when it comes to cost. A cultural shift is needed so housing organisations recognise their philanthropic and strategic duty to share what they pay for MMC, encouraging others to consider it.
This collaborative approach must also apply to how housing associations work with MMC manufacturers. Being open and honest about risk, sharing problems together, and nurturing innovation will support manufacturers and help the market to mature.
I see my housing organisation, Abri as being in partnership, not just with our manufacturers but every social housing provider considering this form of construction. We are all working towards the same philanthropic values, and we have a responsibility to share our learnings and our budgets to reach a critical mass. If we get to that place of trust and co-operation, the scales will tip and everyone will feel the benefit, most importantly our customers.
This article was first published in Housing Today 3 August 2022
Membership of Building Better is open to any housing association or local authority housing provider in England and Wales.
