Leading housing professionals discuss offsite construction and the challenges in making the jump.
Just last month, in a dramatic move, Japan's biggest house builder and modular housing specialist, Sekisui House, announced it had struck a multimillion-pound deal with Homes England and UK developer Urban Splash to build thousands of modular homes across the country.
The issue of the upfront costs of offsite construction are often raised by chief executives and development directors, while manufacturers are often heard voicing their frustration at the housing sector's love of pilot projects, which limit economies of scale.
Some of the senior figures at the round table, however, feel the debate about modern methods of construction (MMC) has progressed in recent times.
Alex Ryan, senior technical manager, Curo Group, Tony Woods, group technical manager, LHC and Nathan Cronk, development director– delivery,
The debate around MMC and offsite is less now about external perception, or whether it is a good thing in principle, and more around the nitty-gritty of cost, time and quality, argues Mary Bennell, director at LHC South West.
"What often happens is an architect designs up a scheme and then it has to be all redesigned for making it production-ready. So you double the time at that front end. How do we reduce that? That is one of the gaps I think we need to close," she says.
For Stephen Lodge, executive director of growth and development at Yarlington Housing Group, there are still some fundamentals that need to be addressed up front. "My view is that maybe the sector has gone about this in slightly the wrong way. We've looked at trying to embrace modern methods of construction – and you've mentioned the government agenda – but there hasn't really been that purchase; no one has said, 'Why are we doing it?'" he says.
For Mr Lodge, this 'why' question is inextricably linked to what he terms the "burning bridge" crises of skills and housing shortages. Could MMC be one answer? Mr Lodge certainly thinks it is part of the equation. "There is a piece about collaboration and a piece about making sure the sector appreciates the need. It is no longer a nice-to-have," he explains.
At a basic level, the sector needs to be clearer what it means when it talks about 'MMC' and what types of delivery work best, argues Stephen Baker, director of investment (homes) at Alliance Homes.
Stephen Baker, director of investment (homes), Alliance Homes and Alex Ryan, senior technical manager, Curo Group
"I've had experience of delivering housing projects with MMC – blocks you stack together or pour concrete in, things like that – but that is not the same as building houses [offsite] in a factory. I would like us to think about what we mean when we say MMC," he states.
This clarity needs to feed into the skills debate, he contends. "Are we going to train people to do different types of jointing on site? Or are we going to put them in a factory? That is something we need to get right."
Phillippa Yeates, regional development manager at Stonewater, highlights that she had a number of sites where offsite construction was being considered but planning delays were an ongoing stumbling block. "That is the critical issue with us: the timing, knowing when it is going on to the production line. We can work with local authorities sometimes to speed things up through the planning process, but the blockage for us is knowing when that is going to come through," she says.
Planning is also a focus for Alex Ryan, senior technical manager at Curo, but she says MMC is a potential solution.
"We get concertinaed in a planning process and we are looking at, if that happens, what opportunity have we got with MMC of speeding it up at the other side? The other opportunity we have identified is infill sites. What opportunity have we got in terms of offsite manufacture to utilise those sites as potential outlets for development?" she questions.
Mary Bennell, director, LHC South West and Stephen Lodge, executive director of growth and development, Yarlington Housing Group
"It is going to be incredibly tight," she concedes. "If we had waited – and sometimes I wish we had – for the formats and the intelligence to come forward about how these are done, I would probably have waited another two years.
"But we've approached it not so much from the skills crisis as the homeless crisis. If we wait for the conventional model to get through on a building project, where are these people going to go in the meantime? So it is looking at how we can use sites quickly. But, wow, we have learned a lot in that process," she adds.
How the sector shifts up a gear, how it takes things up from cottage industry/pilot project level is a key issue for Tony Woods, group technical manager at LHC.
He also worries that, while house builder Barratt has recently set out ambitious plans to use MMC in the construction of 20% of its homes by 2020, the social housing residential sector is now at risk of being left behind when it comes to finding solutions to current housebuilding problems.
Oona Goldsworthy, chief executive, United Communities and Stephen Lodge, executive director of growth and development, Yarlington Housing Group
"It is a bit like a tsunami: the public sector is standing on the beach watching fish flap up and down and the private house builders are already up in the hills moving away. So we have got to look at how we move forward quicker, at a quicker pace," Mr Woods emphasises.
"It's a bit of a chicken and egg scenario," agrees Nathan Cronk, development director – delivery at LiveWest. "We know we've got the growth coming; there is a pipeline. There is a problem where the companies coming to us are wanting to see stuff happening now and it is not going to be overnight. We need to look a couple of years into the future and start to build up from that point."
Stepping up the pace
Nevertheless, it is imperative for housing associations to be stepping up the pace, argues David Aldwinckle, property director at Magna Housing. "I think now is the time for us to bite the bullet and accept that too much of traditional build housing isn't up to scratch, for lots of reasons.
"I'm not suggesting that in the factory you can absolutely guarantee things won't get missed, but I just think it is much, much less likely because of the quality control you can have in a factory compared to a windy, wet field on a Friday afternoon," he says.
What is also clear as the discussion develops is that, if MMC and offsite are ever to gain scalable traction, new thinking and processes will need to grow.
Stephen Lodge, executive director of growth and development, Yarlington Housing Group and Phillippa Yeates, regional development manager, Stonewater
This involves everything from, as Mr Cronk suggests, looking at how to get modular units down narrow Cornish lanes, through to managing new relationships with factories and new – or at least different – forms of contracts, through to rethinking procurement and, as Ms Goldsworthy argues from her experience with LaunchPad, how you cost VAT.
"I was shocked about the lack of intel out there," Ms Goldsworthy states. "I went to what I thought were industry experts and everyone I could think of and, actually, I still couldn't find the answers to some of those questions, and we have had to sort of make it up as we've gone along."
"There are many, many reasons not to do it – it is a lot easier not to do it," agrees Mr Lodge. "What excites me about Homes England's partnership with Sekisui House is they are not a cottage industry. I think that's a significant change because we are moving away from the cottage industry to 'international organisation, done lots of these'. I think we need to move into that manufacturing mindset."
As the discussion draws to a conclusion, the event's chair, Martin Hilditch, editor of Inside Housing, asks the panel to consider how any scaling up will be driven forward. "Who is going to drive it, Homes England?" he asks.
"For me, it has to be," states Mr Baker. "I would love it if we were all able to form big, regional consortia. I would like to hope that would be the case and we would support that. But that is very, very complicated because we do all have slightly different agendas."
But the housing sector can and should be doing more to drive things too, our panellists suggest.
Tony Woods, group technical manager, LHC and Nathan Cronk, development director, – delivery, LiveWest
"I think early engagement is essential. Make sure that whatever experiences we learn do get written down and do get widely disseminated," says Mr Aldwinckle, with Ms Ryan agreeing that education is the key.
"We've definitely got the ambition to do it," states Ms Yeates. "Get your financial director behind it," adds Ms Goldsworthy.
"I think we will be looking at a success story," states Mr Lodge, adding: "If we don't do this, the delivery of housing is going to fall off the face of a cliff. If we're not going to deliver, we're not going to beat the housing crisis. We have no choice but to make it work."
"It is about confidence, isn't it?" adds Mr Cronk. "Until we've done it and it's working, people will always be sceptical. At the minute it is all new and a big leap of faith. We've kissed a lot of frogs and only some of them have turned into princes. So I think it is about bringing new players into the market and it is about people investing and saying, 'Yes, show us your order book and we will deliver it for you.'"
"For me, it is about needing to collaborate," says Ms Bennell in conclusion. "We don't need to be precious. I'm LHC, but it is bigger than that. We need to collaborate across the sector and in the South West to really flush out the leaders in terms of the production and get those pipelines working. I think that's really important."
Mary Bennell, director, LHC South West
- David Aldwinckle, property director, Magna Housing
- Stephen Baker, director of investment (homes), Alliance Homes
- Mary Bennell, director, LHC South West
- Nathan Cronk, development director – delivery, LiveWest
- Oona Goldsworthy, chief executive, United Communities
- Martin Hilditch, editor, Inside Housing
- Stephen Lodge, executive director of growth and development, Yarlington Housing Group
- Alex Ryan, senior technical manager, Curo Group
- Tony Woods, group technical manager, LHC
- Phillippa Yeates, regional development manager, Stonewater
- Sponsored by LHC South West