VIDEO | Can off-site construction be part of affordable housing toolkit?

Homes England saw social housing as an opportunity to drive volumetric off-site construction. However, modern methods of construction’s troubled adolescence suggests that the move off-site is coming too soon for the culture and realities of the UK affordable housing sector. This has shaken the confidence of housing association development teams, boardrooms, and investors.

These were the findings of this roundtable discussion hosted by Place North West and Saint-Gobain.

Meanwhile, Category 2, including timber and steel frames and pre-built, panelised solutions, such as those supplied by Sain-Gobain, have quietly established themselves on most developments. It’s no longer MMC – it’s standard.

Moving forward, the industry needs off-site solutions to be simplified as it’s still too confusing and defined not by the market but by public money. This has caused problems for the different elements of off-site – it can’t be used as a ‘magic bullet’ for a perpetual crisis.

Participants:

• Tom Cox, construction solutions director, Saint-Gobain Off-site Solutions
• Stephen Heverin, director of growth & regeneration, Onward Homes
• Helen Spencer, executive director of growth, Great Places
• Julian Howarth, construction director, The Guinness Partnership
• Manuel Atkinson, director, BTP Architects
• Colin Lafferty, senior development manager, Torus
• Paul Mullane, director of development and sales, Halton Housing & Building Better
• Dominic Conway, group director of development & growth, Bolton at Home
• Dan Whelan, deputy editor, Place North West

Viability

Making schemes viable is a real issue for developers and can be an incentive for considering whether to use MMC as a solution. MMC is often found lacking when it comes to making a lot of schemes stack up in poorer markets where end values are not high enough to make MMC work. Housing associations in particular have low rents that are set by central government and makes business plan modelling a challenge.

Making product that is affordable for customers who are struggling with the cost-of-living crisis is another consideration. The extra cost of MMC cannot simply be passed on to the tenant or buyer. Social housing providers do not want to build homes for people who cannot sustain their tenancy. This all makes for a complicated situation for developers who are trying to make viability happen.

Meanwhile the housing crisis only gets bigger. One housing organisation gave the example of 500 applicants for every unit, compared to 50 a few years ago.

If MMC were cheaper all housebuilders would use it. MMC is currently a few percentage points more expensive than traditional methods and materials. MMC providers need to start producing what the marketplace wants.

Supply chain

Residential developers generally accept that off-site solutions are part of the answer, particularly with sustainability and stricter technical regulations brought forward with energy efficiency and building safety controls. However, too often their construction partners and subcontractors find it hard to adapt their processes to accommodate MMC materials. Developers are scratching their heads over how to break down barriers to new products and, in turn, to open up the possibility of directly tackling costs by working in novel ways.

The scale of insolvencies within the construction industry has kept many developers awake at night in the past few years. A large developer might be spending hundreds of millions of pounds on new build each year, and repeatedly losing contractors is a significant hit on the programme.

Quality

Another area of concern from developers was around the quality of the product coming from MMC contractors. Developers found that Category 1 MMC producers – a whole unit produced in a factory – are producing “what they want to produce because it’s easy, but it’s not what we want”.

The feeling around the table was that Category 1 compromises building safety and quality. MMC would be more likely to be taken up if it was a higher quality that reflected the higher cost. It can be catastrophic when MMC fails on site and this makes developers wary. If MMC was considered earlier in the process it would stand a better chance of adoption.

Regulations

Decent Home Standards, Part L energy saving, biodiversity net gain, are all necessary for greater mitigation and performance control in the climate change era but are severe headaches for many in the property industry. All are a potential constraint on how many units a developer can afford to get onto a site. Investing in existing stock to get it up to standard, bringing homes up to greener and safer basic provision, against an ongoing uncertain government funding backdrop, are hindering growth ambitions and reducing the chances of moving to MMC.

One solution is to keep educating the workforce internally. Keep asking ‘what innovation is out there’. Normalising the idea of zero bills for residents – a selling point for better-insulated buildings through MMC – is going to push the market towards more sustainable products over the next five years.

Categorisation

The 2019 definition of seven types of MMC starts with the whole 3D unit at Category 1, through 2D materials to improved site process and productivity improvements at Category 7. The consensus at the roundtable was that ‘everybody has been burned somewhere’ on Cat 1 and that puts you on the back foot. Cat 2 and below are more successful than Cat 1; more readily delivered and seem to work.

Rather than focus on full modular, the industry should accept that for now Cat 2 materials are the way to go for the successful implementation the high-risk world of property requires.

Instability has been the trend for Cat 1 as factory contractors come into tension with the bespoke nature of planning to meet the unique requirements of each particular site.

One participant explained: “You’ve got an expensive project. You’ve invested in trying to bring people along with you, and then at the end of the day it’s not delivered what you’re anticipating, and that’s the worry for the likes of people around this table.

“You end up with a negative experience. You’re constantly battling with your technical services team to take responsibility once the properties are built. If they get a bad experience, I’m going to really struggle to convince them and win support going forward.”

Another speaker picked up the theme and continued: “We’ve almost tried to get to a full volumetric turnkey solution in a sector that’s driven by planners who want bespoke solutions, and those two don’t mix in a factory environment. There is that little bit of a happy medium in the middle ground of Cat 2, which does work quite well if it’s planned properly from day one, starting to understand what the systems are, how those systems can meet the output the client wants within the brief, and how it’s wrapped up and brought to site.

“That’s a solution, but looking at the Cat 1 MMC as it was where the driver was always to have as many houses all the same just copied and pasted across the site, that’s where we started off. Whereas with Cat 2, everyone in the industry now accepts that’s the norm to go to, certainly with the Part L [energy performance].

“When I started 20 years ago, even timber frame was the devil in the industry, and it’s now moved on from that to where it’s readily accepted and everybody is happy building with it. But what is that next step?”

• For more from this roundtable discussion, watch the video at the top of this article or on the Place North West YouTube channel.  Learn more about Saint-Gobain by visiting saint-gobain.co.uk.