With a housing shortage demanding rapid solutions and major investors now moving into the offsite market, could it be that modular housing’s time has come at last? James Kenny reports.
The news in February that insurance and investment company Legal & General was making a bold move into the house building sector with the launch of a modular housing factory near Leeds was a sign that offsite construction could be moving into a new era.
L&G announced that its new £55m investment, set to launch around June, is expected to be the largest in Europe. The homes will be completely constructed offsite – including white goods and interiors.
This is the first time a major investor has moved into producing offsite homes, demonstrating the changing attitudes to what has been seen as a niche part of the housing industry. But contractors are also upscaling their commitment to offsite: Laing O’Rourke is due to open a new offsite housing production facility at the end of 2016, and Willmott Dixon has also just announced deals with two offsite suppliers, Fusion Building Systems and Robertson Timber Engineering, to build up to half of its 2,000-home-a-year output with offsite methods.
1999
Cartwright Pickard’s Murray Grove was built of steel-framed modules
While offsite housing has been voiced as a possible solution to the housing crisis many times before – see timeline – it has yet to take major hold in the industry or shoulder responsibility for addressing the UK housing shortage. But with the government targeting a goal of 200,000 new homes a year in England and Wales – but only averaging around 140,000 – new thinking is urgently needed.
The repetitive nature of offsite construction means it’s often a cheaper way to deliver homes, but only if done at scale against a backdrop of demand certainty. But the lower costs on offer are increasingly compelling, given that construction inflation is soaring, putting the viability of some developments now under threat.
James Lidgate, director of housing at Legal & General Capital, says the growth of offsite construction has been slower than a lot of people had hoped for, as the result of prevailing “short-termism” in the housing market – continuity of demand was difficult to achieve, and the resulting stop-start flow of orders to offsite manufacturers compromised their financial viability.
But these market fundamentals have shifted, he believes: “The opportunity for offsite construction is unquestionable and I have no doubt we will look back in 10 years’ time and wonder why more homes weren’t built this way before.”
Build-to-rent driving demand
One key factor driving future uptake of offsite residential solutions, Lidgate believes, is the growth in the private rented sector (PRS): “Offsite construction is almost a perfect fit with the build-to-rent market, particularly due to the sector’s non-cyclical characteristics. The design aspects can be fully detailed before the manufacture commences, the homes are more thermally efficient, the quality can be assured and the speed on site is significantly better.”
2007
Richard Rogers’ Oxley Woods, Milton Keynes, used prefabricated components
But he calls on the government to do more to incentivise offsite methods. “One way in which central and local government can really help create a step change is through their procurement strategy. On publicly owned land, there is no reason why a higher weighting couldn’t be given to those developers and contractors that utilise offsite construction techniques. There are demonstrable benefits, and this should be given more consideration.”
The dawn of the offsite housing era has been heralded many times before, recalls Oliver Novakovic, technical and innovation director at Barratt Developments – but he also believes this time it will become more established: “I’ve been in offsite for more then 20 years, so this is the third cycle I’ve seen. I think the skills constraints and shortage we have now is more profound then ever before. In this sense I think many companies including us are being a lot more robust in our approach to offsite.”
As well as feeding the burgeoning PRS sector, Novakovic believes its future lies in greater integration of offsite elements into conventional construction programmes: “The technology can only help the industry and fill some of these gaps. It’s all about how you integrate it into the house building model. Over the next year we’ll see more of the basic offsite approach being integrated into housebuilding, I think. We’ll see a definite move of companies bringing offsite systems in-house, such as timber-frame, steel-frame, open-panel.”
2011
Make’s Serpentine housing in Aylesbury used offsite timber frames by Stewart Milne (Google Street View)
But he agrees that government support is critical, and says that the next year will be “very interesting to see what government will do. So far they have been pretty supportive and have held sessions to see what they can do, but I think now with the massive housing targets they realise that offsite is a genuine answer.”
He adds: “I think we’ll see more factual and practical support than there has been before and a move away from just discussions – you want to see government and industry aligning.”
James Pickard, director at Cartwright Pickard Architects, a long-time champion of offsite construction, agrees that government policy needs to do more to incentivise the sector, including policies to ensure that public sector land can reach prospective self-builders and custom-builders – another possible source of demand for offsite construction.
“Instead of being gobbled up by some of the large house builders, the government should make 50% of the public land available for self-build and custom-build.”
2012
Skanska used the Swedish ModernaHus system on its Fabrik scheme, Brixton
Pickard continues: “The elephant in the room that nobody wants to talk about is that the volume house builders will never ever solve the housing crisis – it’s not in their interests financially. But one way would be to be to unleash the potential of the offsite and custom-build market. Every other European country has a massive amount of self-build and we’re missing a trick.”
As Pickard points out, offsite, prefabricated housing and modular construction are widely used in countries such as Sweden, Germany and Norway – and further afield in Japan and Australia. It’s the norm to have large-scale factories churning out liveable, affordable high-quality homes.
For instance, Lindbäcks, a 90-year-old company in northern Sweden can produce apartments, student housing, sheltered housing and single family homes at a rate of 20 units per week. The units appear bespoke, but in fact are built on a highly standardised chassis.
Introducing BIM efficiencies
Using “lean” manufacturing techniques – minimising waste and utilising CAD/CAM methods – is often a key part of offsite production around the world. But Adam Wilson, project engineer at Waldeck Consulting, says that BIM will bring a further dimension to offsite efficiency: “Up until now, developers have been unable to reap the full benefits of BIM due to inefficient onsite collaboration neutralising efficiencies made offsite.
The BIM Level 2 mandate introduced this spring will help tackle this issue, as the government aims to promote collaborative working protocols throughout the entire offsite sector.”
2015
William Street Quarter, Barking, used Laing O’Rourke’s offsite manufacturing
And in future, he says, the industry needs to extend its shopping list of offsite components, to include more options on frame and envelope: “Waldeck was recently involved with an 11-storey residential development in London using precast concrete columns. These were assembled on site once the floor had been poured, saving a considerable amount of time and money. In the next couple of years the industry needs to move towards the production of foundations off site, currently one of the most time-intensive stages of a project.”
Wilson adds: “Composite panelling is the next big thing for domestic offsite construction. For steel-framed houses, separate teams currently work on site to deal with the internal and external skin of the building. Constructing composite panels off site which incorporate both layers will reduce the number of teams required on site, improving overall efficiency and safety.”
Rob Charlton, director of Spacehus, has pioneered a different model of offsite housing. Spacehus is structured as a “virtual factory”, with a number of suppliers around the country providing capacity as needed, but not working on it full time. “You don’t have huge overheads when not building so that gives us maximum flexibility,” he says.
2015
Spacehus built four homes in Blyth in 16 weeks using Swedish components
In the five to six years Spacehus has been in operation, Charlton says that the market has already changed out of all recognition: “The market has gone from social rented to very much around homes to buy. Offsite is now becoming more and more accepted. If you go back quite a few years they were kind of prefabs, or temporary buildings. Now they are far more accepted and people appreciate that modular can be a solution.”
But while the current environment for offsite residential development clearly presents opportunities for developers and contractors that can control the supply chain, open up a pipeline large enough to keep costs down and tap in to people’s increased willingness to live in non-conventional structures, Charlton points out that competitors have also spotted these market conditions – he’s seen increasing volumes of offsite residential components arrive from China.
As voiced in this article, maybe it’s time for the government to step in with hard policy incentives to join the offsite rhetoric.
‘The developer gave me this challenge’
Architect Simone de Gale’s first offsite venture paid off
Simone de Gale Architects in London is working on a project for 44 new apartments in Southall, west London (above), where the developer client insisted on using an offsite system – a new frontier for both of them.
During design research, practice founder Simone de Gale travelled to Vienna to meet the modular manufacturer, Containex, which sells its products all over Europe.
“Up until the last couple of years, offsite construction has probably been seen as a subsidiary development type and not respected to the level it could be,” she says. “Some buildings might not be as appealing aesthetically to the eye, to the buyer, so there’s a little bit of a stigma around it.
“But I believe that, as architects, if we are able to be clever about how the aesthetics are used and implemented in offsite construction, then it will definitely endear itself to the public and buyers who are looking at the market,” she continues.
“From an architect’s perspective, what the developer has done is given me this challenge of having offsite construction and how I would implement this as an architect. So it’s a modular construction and we’ve taken the standard sizes [of modular units] so that we can connect the space and make it work for our aesthetic and design plan.”
She adds: “We’ve also introduced a cladding system and we’ve also introduced dormer-type roofs, so it looks like Georgian properties but we know they’ve been introduced through this offsite system.”
The client is very satisfied, says de Gale, who is preparing for planning submissions. “We’ve done public consultations and everyone is very happy,” she adds. “It also picks up on design features in the area so we feel we have a very strong application to present to the planners. What I think is really, really smart about this proposal is that my client will be able to save about 50% of the cost, just because it’s offsite. But once it’s built it will look original.”
