Government Fully Supports Modular Construction – What Does This Mean For Traditional Housebuilding? – Real Estate and Construction – UK – Mondaq News…

08 October 2020

Charles Russell Speechlys LLP

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In my July article, I commented on how Modular Construction wasmoving up the Housing Agenda. Today the Times has reported on Government plans for a majorinvestment in factory-built homes. This was part of a key speech byRobert Jenrick at the Conservative Party conference and has beensupported by Rishi Sunak, the chancellor, and Steve Barclay, chiefsecretary to the Treasury.

Robert Jenrick's comments are significant to the future ofhousebuilding. We are already seeing some of the traditionalhousebuilders invest in modular construction. For example: BerkeleyHomes has set up a modular construction arm. Countryside isinvesting circa 20m in a modular construction factory.Barratts intends to construct 20% of its homes off-site. TheGovernment believes that this initiative would aim to deliver75,000 modular homes a year by 2030, creating up to 50,000 jobs andreducing carbon emissions from new homes by 40 per cent.

Whilst there are many barriers to overcome with modularconstruction, with Government backing, the housebuilding industrywill need to adapt, in particular if housebuilders wish to workwith Homes England or London Councils who will all have the abilityto force a housebuilder to provide a modular element in the tenderprocess.

With sweeping planning reforms approaching (see a planning white paper summary here), it is possible thatpermissions for certain types of developments will only be grantedif there is a modular element.

Many modular construction companies are already recruiting landbuyers and project managers from traditional housebuilders. This isa positive sign as it shows that modular construction companies aremoving away from engagement as a (albeit main or single) contractorbut into a housebuilder model where particular care is given to thelong-term strategic goals of regeneration.

It is also significant that this latest announcement from theGovernment is being reported in the Times. Modular construction isa fairly niche topic and typically only people with an interest inhousebuilding take note of these changes. However, given this isbeing reported in some of the mainstream media it shows howimportant this topic is becoming. The Government has certainlysignaled its intention to back modular construction and it will bevery interesting to see how the housebuilding industry evolves.

I will certainly keeping a close eye on how this develops asthis continues to look like a serious shake-up of the industry.

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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