Following the UK’s modular construction space can be like watching a rollercoaster negotiate a sequence of peaks and troughs – with a loop-de-loop thrown in for good measure. While the sector has seen its fair share of bumpy stretches of late, things look like they might be back on the up, as Tim Clark reports
In early 2022, the outlook for modular construction was less than rosy. The construction sector was still recovering from the COVID-19 pandemic, the UK was on the verge of a cost-of-living crisis with a recession forecast, and a number of high profile modular firms went bust, including Urban Splash’s joint venture with Japanese modular giant Sekisui.
Twelve months on and the sector seems to have turned a corner, with major housebuilders now delving back into the MMC sphere and others u-turning on decisions to mothball their own modular operations.
Housebuilding titan Barratt Homes has announced plans to invest £45m into a new timber frame factory; Taylor Wimpey has followed suit with its own plans; and Vistry, which bought housebuilder Countryside Partnership, aims to re-open its vast £20m Bardon production facility by the second half of 2023.
Vistry’s takeover of Countryside means the housebuilder has three factories. Two in Warrington and Leicester are capable of building 2,800 homes a year. The now reopening factory will be able to deliver 5,000 homes per year.
Barratt’s new factory will be located at the Infinity Park industrial site near Derby, and once operational, will employ 200 people and help Barratt build more offsite homes to meet its 2025 Future Homes Standard aims.
The announcement was followed by news that fellow housebuilder Taylor Wimpey will be investing £60m into a new timber frame manufacturing hub in Peterborough.
Taylor Wimpey agreed a 10-year lease on 240,000 sq. ft of space for its new site, which it stated is being built to achieve its goal of increasing timber frame usage on its developments.
The trio of new factories pushes the world of MMC and modular closer to the tipping point, where it becomes a comparable option for most housebuilding projects.
Steve Cole, director at Make UK Modular, the UK trade body for modular manufacturers, sees Barratt as part of a wider series of events within the industry over the past 12 months.
“Barratt have always put quite a bit into research and development but any major housebuilder engaged in offsite manufacture is an interesting sign of travel,” he says.
“You’ve got a number of things like that coming online such as Top Hat’s new factory comes online at the end of this year.
“You have a volumetric building company coming into Europe, coming into the UK. Even the JRL [group are] buying Caledonian Modular.”
The new factory plans by Barratt form part of a long-term strategy from the housebuilder. In 2019, it announced that one in five homes would in future be built, or at least party-assembled in factories.
The economics behind the decision, at least from Barratt’s perspective, are clear. At the time, the housebuilder claimed it took 40 weeks to build a home using traditional methods and £120,000. An MMC approach could cut that time to 10 days, as well as cut prices.
In 2021, it ramped up its modular target to 30% of homes by 2025. In 2021, 25% of its homes, or 3,003 were timber framed. Barratt CEO David Thomas commented at the time that modular use had risen due to an “accumulation of knowledge and experience [which] has allowed us to define the criteria needed to unlock the benefits of MMC and deliver a successful site in terms of build efficiency and sales”.
Slotting into place
The flurry of investment, however, is only one part of the modular story.
“It’s important to emphasise that there are many pieces to the MMC puzzle. Barratt may be opening its first timber frame factory, but this is only one example of a Modern Method of Construction [MMC],” says Kevin Allen, associate director at TFT Consultants.
“It isn’t necessarily representative of every aspect of that sector, and it isn’t the same as modular building. We remain confident in MMC’s potential, as a whole sector, to shape the future of our built environment.”
He adds: “Doing so will require developers to embrace one or more of its ‘methods’ in a way which works for them.
“However, modular building continues to present challenges to developers and building owners.”
The big issue for modular and MMC is what the industry needs to do to reach the next step of its evolution: the application of modular homes at scale.
According to Chris Bone, co-founder and CEO of Modulous, fragmentation is the construction industry’s greatest challenge, and modular is no different.
“Lack of transparency, vested interests, siloed working, and project overruns combine with rising interest and material costs, labour shortages and the drive to net zero to create a perfect storm of diminishing margins and dispute,” he says.
“It is only by reducing the cost burdens that we will see scale, and for us, that means adopting an asset-light kit-of-parts approach, where we leverage the existing supply chain to produce the standardised elements that come together local to site to create a modular building system.”
Jessie Wilde, deputy project director at Bristol Housing Festival, says that engagement between planners and the modular industry may also pay dividends.
She notes that local councils could also play a part working with modular partners to build homes that have standardised kits of parts that can make future maintenance easier.
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“Paying a little extra, and working with a modular company to tweak designs to use materials which modular firms have standardised or in stock, could make both councils’ and registered provides’ lives easier in the next 20, 30, or 40 years as we come to replacements and repairs,” she says.
Wilde says the modular industry and local councils or clients could both gain from having conversations on how the collaboration could work better.
“There are a lot of [offsite] factories up north,” Wilde says, “but there needs to be a space where learning is being collated and skills development is happening and the education of planners and local authorities takes place.”
Bristol and the regional body West of England Combined Authority (WECA) is mulling a plan to turn the region into a skills hub, building on the back of the success of a number of modular schemes in the city.
Alongside homes built by councils and housing associations, according to Adam Darby, associate at global design practice BDP, build to rent is one area where modular construction could play a larger role.
“Productivity has changed little in the construction industry – the only way we are going to see real change is through working together”
“It [build to rent] is perfect for MMC and a growing sector,” he says. “But not all are taking this route due to supply chain issues in the UK.”
Darby says that only a few volumetric suppliers currently exist in the UK, which is where the adoption of timber frame factories by housebuilders Barratt and Taylor Wimpey could change the dynamic, even if working in unrelated parts of the construction sector.
The use of timber frame by major house builders can also help normalise the construction methods for insurers and funders, which have been careful to limit their exposure to what is still a relatively unknown quantity, at least from an insurance perspective.
“A lack of education [or modular construction], or understanding about MMC with some funders or insurers having a cynical view of ‘new’ methods has been an issue,” Darby says.
The information age
According to TFT’s Allen, a lack of industry data is one of the factors behind hesitancy from funders and insurers.
“More ‘as-manufactured’ data is required to verify the claims of modular providers for their products and services which, in turn, will help to enhance the confidence of investors, funders, insurers, and warranty providers,” he says.
“Despite significant advances in technology in recent years, modular manufacturing remains in an R&D phase, relative to established traditional methods of construction.
“More clearly defined standards are needed for the industry, from standardisation of manufacturing details to design processes and information exchanges.”
He adds: “Also required is a change in thinking towards modular which places an emphasis on how standardisation can not only help to de-risk but also help to offer greater choice and flexibility to designers, rather than limit their outputs.”
Will big developers and modular firms link up in future to help keep factories open and fill inventories? Collaboration could be a logical step for firms once the initial steps in onboarding modular work is established.
“Enablement, collaboration, and partnership are key mantras of ours – construction is one of the least innovative of any major industry,” Modulous’ Bone adds.
“At the same time, productivity has changed little in the construction industry in the past 50 years and remains below the UK average.
“The only way we are going to see real change is through working together, and it is our ambition to be one of the catalysts of this new culture.”
Main image credit: DALL.E
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