Written by:
John Jackson
Section Editor
Business News Wales
It's difficult to avoid news stories that feature Modern Methods of Construction (MMC), with new schemes being announced on a near daily basis, and as the name suggests many are becoming increasingly innovative in the ways they embrace these methods of construction.
The scale of the developments using MMC is also increasing. For example; The Royal Borough of Greenwich in London has recently announced a £300m scheme that will result in 1,500 affordable rent council houses being built using modular construction methods.
In August 2020, in terms of the overall sector, Business News Wales reported that;
“The proportion of homes built using MMC over the next 10 years will rise from around 8% today closer to 20% according to a new report from real estate advisor Savills.” This report also provides a clear definition of MMC, covering the off-site manufacture of modular homes, panels and components, to on-site process improvements.
Significantly The Housing Finance Corporation has announced that it “is looking to take on modular homes as a form of loan security” as reported by Inside Housing, 28 August 2020. This will help to provide reassurance to lenders who have raised concerns about the viability of modular construction as a long term form of security, and should as result see an increasing number of housing associations undertake developments using MMC techniques.
In Wales the Welsh Government have shown a clear commitment to MMC with their February 2020 report:
“Re-imagining social house building in Wales. A Modern Methods of Construction Strategy for Social Housing.” The report proves a very concise explanation as to why MMC is going to become an important part of the social housing mix in Wales: “Simply put, encouraging the use of MMC for the delivery of social housing means we can provide more homes for the residents of Wales. They can be produced in a way which is good for the economy and businesses, for communities and individuals and the public purse.”
Offsite panel systems and fully built volumetric factory built modular housing, if manufactured in Wales have the potential to provide the numbers of homes needed to alleviate the housing crisis. Additionally these systems could also create much needed skilled jobs in the factories where they will be made. However, modular homes can and do travel across borders, in New Zealand for example a developer is importing fully completed modular homes from China. If Wales became an importer of modular housing, even from countries closer to home, it could have a significant negative impact on the numbers we could employ in the growing MMC construction sector in our country.
This is a sector where we can’t afford to be left behind as its potential for creating jobs and supporting our economy is far too important, which in itself helps to highlight the need to prioritise the training and apprenticeships needed, along with supporting existing MMC businesses in Wales to reach their full potential, whist encouraging new ones to enter this growth market.
MMC is evolving, and with it new ways of making homes more liveable are becoming increasingly apparent. Developer Urban Splash is offering customers the option to customise the layout of their modular homes to meet their lifestyle needs, and in Pittsburgh, developer Module has developed a modular home that allows the roof to be removed and an additional floor added at a later date if extra space is required. This level of flexibility could have strong appeal for private house buyers, and create further demand for modular housing.
Overall the increased adoption of MMC, and in particular modular construction has the potential to deliver the much needed affordable new homes Wales needs, and it also creates an opportunity for buyers to create homes that better suit their needs. In terms of our economy MMC also has the potential to create new jobs in the factories where the houses would be made, and with ambition Wales could also look to become an exporter of homes. Investors such as Goldman Sachs have already seen the potential having invested £75m in modular, and for Wales, if fully embraced, MMC has the potential to deliver significant social and economic long term benefits to our built environment.
