UK finally seeing the light with Off-Site Construction……would Churchill be proud?

• Mounting pressure by the government to deliver 3.1m affordable social homes.... whilst currently around 60% of new homes are built by just 10 companies. The Independent Newspaper reported 8th January government are providing a £9Billion affordable homes programme that will deliver 250,000 homes by 2022, including homes for social rent. A further £2billion of long term funding has already been committed beyond that as part of a ten year home building programme through to 2028. Also giving councils extra freedom to build the social homes their communities need and expect.
• Off-Site is safer, quicker, better quality & greener with considerable focus on the UK government to create a greener environment including a reduction of emissions to 100%, Off-Site Manufacturing (OSM) is starting to be taken seriously with a big tick in the box for a green mandate. This month Parliament declared a 'climate change emergency'. Many reports produced encouraging OSM including the Farmer Review.

• UK factories struggling with delivery, overseas 'smart' Off-Site Manufacturers have a perfect opportunity to break-in to the market as the majority of UK home grown factories are currently small (almost 'cottage industry' with converted warehouses) in comparison, with most new larger British factories entering the market not in full 'proven' production as yet, limited experience of rollout and decades behind other nations, one seriously over budget & delayed. Rolling into full production is a significant difference 'v' creating prototypes and half of the UK councils are expected to miss housebuilding targets. Some awarding off-site pilot programs to local factories yet scaleability for UK OSM's is a serious challenge. Aside of procurement problems the National Audit Office (NAO) concludes that the planning system in England is “not working well” and says councils are struggling to negotiate successfully with developers, leaving swaths of the country vulnerable to either housing shortages or situations where the wrong homes are built in the wrong places. Since 2010 there has been an almost 40% real-terms cut in spending on planners, according to the public spending watchdog. JLL suggest it would take 200 factories the size of football pitches to help towards solving the UK housing crisis (see my previous blog here), ACE Modular Construction think this is dependent on 'smart manufacturing' with a radical digital transformation not size so much if designed correctly, but the issue is lack of experience with a dire skills shortage. That's not to say people couldn't be trained as a large proportion of the requirement is semi-skilled.
• A handful of UK OSM success stories include a collaboration in Croydon, where the world’s tallest modular towers are being created. At 37 & 44 storeys, commissioned by an outsider to the UK housing sector: the US build-to-rent developer, Greystar. They are being built by Tide Construction with volumetric modules supplied by Tide’s associate company, Vision Modular Systems, totalling 546 apartments:- encouraging news for our country which proves collaboration is key.
• Collaboration is the solution working smart utilising both overseas & British professionals in their field to deliver serious production roll-out to provide homes that our nation deserves. The additional challenge is that not all OSM's are interested in entering in to the bureaucracy of working with UK local authorities where a demand to be perhaps cheaper (why?) & competing head to head with local firms whom are likely to be favoured, but perhaps some yet to be proven to be able deliver beyond producing initial prototypes, unbeknown to the LA's.
• OSM is not 'cheaper' than traditional construction, it is technically more 'cost effective' and there is no reason why local contractors/partners can not be contracted to provide critical ground works, MEP etc and a selection of trainees to be given exposure to the process for good measure, under the premise of an academy. Naturally, not all developments suit OSM due to certain reasons but yet still many contractors don't welcome it for what they consider eating in to their profit, though many recognise things have to change to accelerate build programs. The biggest challenge of the build process being 'fit out' so there is an appeal for 3d volumetric, 95% built off-site. More attention required in the initial design to avoid costly changes later on is the only downside for some, but why not plan more efficiently in the first place? Change of use is another concern, however with modern day OSM there are now options for relocatable buildings therefore sections can be removed or added.

• Quality assurance is a given when it comes to Baltic OSM production who have built using this method for decades, to the highest standards for the Scandinavian market who demand the best quality, better than the UK, are now robustly targeting the UK with our support for a mass roll out helping to solve crisis. In addition many other countries inc; Turkey, France, Germany, Poland, Slovenia, America & China are playing their part with state of the art modern methods of construction inc; volumetric, cross laminated timber, light weight steel/concrete panels & more popular 'hybrid' systems that can either be constructed on site or pre-created in volumetric modules at the factory depending on a variety of factors inc; transport, access to the site. It's down to the property developer's preference how much work & risk they wish to take. The UK has learn't that cheap housing doesn't pay long-term, the days of post-2nd word-war prefabrication houses instructed to be built by Sir Winston Churchill, to last just 10 years, are not comparable, by providing state of the art quality housing that requires low (if any) maintenance it makes far more sense to build quality to last for the future. Achieving warranties for overseas quality was never really an issue (albeit it helped the doubters slow the process) & investors have had a radical change of heart when it comes to OSM accepting that quality is at the forefront of manufacturing achieving sustainable assets.

Investors welcome Off-Site, shorter build times allow investors to receive their return on investment sooner (IRR) with less exposure to changes in market conditions/unpredictable build times tie up an investor funds for longer with increased risk to changes in market conditions. With high quality affordable housing more than achievable modern methods of construction create virtually maintenance free housing built to the highest standards. Overseas OSM's are reliant upon collaborative working with local delivery partners combining effort sharing risk & working towards joint ventures, some easing payment terms as was and more open to consider taking the upside of profits. A general lack of understanding/appreciation of modern day OSM is prevalent in the construction sector but clearly the pressure is on to revolutionise.