Could modular housing help Britain build the homes it needs?

Pre-fabricated housing being moved into position in Los Angeles in 2012. Image: Getty.

We’ve got ambitious government targets, an appetite to build and huge numbers of people who need housing. But we’ve known all this for some time, yet we are still in the same situation – a housing crisis.

So let me start with an obvious yet uncomfortable truth - relying solely on traditional construction methods will not halt the housing crisis. This isn’t a comment on the traditional product or its processes, more a reiteration of a well-known fact: skills capacity is also at crisis point. 

It’s a stalemate situation. In 2016, the Joseph Rowntree Foundation released a report on the relationship between housing and employment. The report found that neighbourhood investment creates a sound basis for employment, and that affordable rent provides a greater incentive for people to work.

One relies to some degree on the other. After all, a home is about so much more than bricks and mortar. So why aren’t we jumping at the chance of doing things differently to get out of this impasse?

The UK is something of an outlier when compared to many of our continental neighbours. Areas like manufacturing have seen steady productivity growth over the last twenty years, allowing more economic growth with the same or fewer number of workers. However, the UK construction sector has seen productivity flat line for the past two decades. This limits growth, and means a loss of more than £100bn a year of economic benefit.     

There are alternative products and processes we can take advantage of – but we seem to be simply dipping our toes in the water. Personally, I think we’re suffering from a lack of confidence. We need confidence in the quality of modular products (which, clearly, from our recent YouGov research, the public doesn’t have). We need confidence in the durability of MMC (modern methods of construction) products.

And we need confidence in the sector that the intention of modular suppliers is to add to capacity, not to replace traditional processes.

This is why my team are currently working with a range of modular and MMC suppliers to robustly compare and contrast a range of housing products. It’s a live research project in Gateshead that will monitor and evaluate the build process and lifestyles on offer through a range of different construction methods – including traditional. The homes will be for affordable rent and tenants will be involved in the ongoing evaluation.


So why are we doing it? If we make this research available to other developers perhaps as a sector we can make more confident and informed decisions about new construction methods.

Because while MMC is being used across the sector, we’re not using it at scale. And its scale that we need to affect change: 300,000 homes is no small number, after all. (What’s more, according to a survey by the Royal Institution of Chartered Surveyors, only 12 per cent of surveyors believe we can hit that target – another confidence boost needed).

 MMC isn’t as affected by the crisis in construction skills capacity. It’s an entirely different skillset. So it’s not about skilled tradespeople jumping ship.

You could almost envisage two different pathways into housebuilding. Studies have told us that millennials are purpose-driven, and therefore most likely to be attracted to organisations that are driven by purpose. So maybe that’s how we have to think about careers in construction.

There may be two distinct pathways being formed with two distinct skillsets – but ultimately, both are responding to the housing crisis. Perhaps that’s the draw. And having increased opportunities may well see an increase in people working in the sector overall. 

We’re not competing in a crowded marketplace. There is a desperate need for more homes. We need to embrace every construction method available to us and work collaboratively to meet the government’s targets.

Let’s keep the end goal in mind and not be restricted with the way we’ve always done things. It’s time to take a different approach.

Mark Henderson is chief executive of the housing association Home Group.

Want more of this stuff? Follow CityMetric on Twitter or Facebook

 
 
 
 

What's actually in the UK government’s bailout package for Transport for London?

Wood Green Underground station, north London. Image: Getty.

On 14 May, hours before London’s transport authority ran out of money, the British government agreed to a financial rescue package. Many details of that bailout – its size, the fact it was roughly two-thirds cash and one-third loan, many conditions attached – have been known about for weeks. 

But the information was filtered through spokespeople, because the exact terms of the deal had not been published. This was clearly a source of frustration for London’s mayor Sadiq Khan, who stood to take the political heat for some of the ensuing cuts (to free travel for the old or young, say), but had no way of backing up his contention that the British government made him do it.

That changed Tuesday when Transport for London published this month's board papers, which include a copy of the letter in which transport secretary Grant Shapps sets out the exact terms of the bailout deal. You can read the whole thing here, if you’re so minded, but here are the three big things revealed in the new disclosure.

Firstly, there’s some flexibility in the size of the deal. The bailout was reported to be worth £1.6 billion, significantly less than the £1.9 billion that TfL wanted. In his letter, Shapps spells it out: “To the extent that the actual funding shortfall is greater or lesser than £1.6bn then the amount of Extraordinary Grant and TfL borrowing will increase pro rata, up to a maximum of £1.9bn in aggregate or reduce pro rata accordingly”. 

To put that in English, London’s transport network will not be grinding to a halt because the government didn’t believe TfL about how much money it would need. Up to a point, the money will be available without further negotiations.

The second big takeaway from these board papers is that negotiations will be going on anyway. This bail out is meant to keep TfL rolling until 17 October; but because the agency gets around three-quarters of its revenues from fares, and because the pandemic means fares are likely to be depressed for the foreseeable future, it’s not clear what is meant to happen after that. Social distancing, the board papers note, means that the network will only be able to handle 13 to 20% of normal passenger numbers, even when every service is running.


Shapps’ letter doesn’t answer this question, but it does at least give a sense of when an answer may be forthcoming. It promises “an immediate and broad ranging government-led review of TfL’s future financial position and future financial structure”, which will publish detailed recommendations by the end of August. That will take in fares, operating efficiencies, capital expenditure, “the current fiscal devolution arrangements” – basically, everything. 

The third thing we leaned from that letter is that, to the first approximation, every change to London’s transport policy that is now being rushed through was an explicit condition of this deal. Segregated cycle lanes, pavement extensions and road closures? All in there. So are the suspension of free travel for people under 18, or free peak-hours travel for those over 60. So are increases in the level of the congestion charge.

Many of these changes may be unpopular, but we now know they are not being embraced by London’s mayor entirely on their own merit: They’re being pushed by the Department of Transport as a condition of receiving the bailout. No wonder Khan was miffed that the latter hadn’t been published.

Jonn Elledge was founding editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.