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Are Factory Homes a Housing Crisis Solution?

The ongoing shortage of available housing in the UK has been a national concern for decades. The Government has vowed to deliver a million new homes by 2020, but with limited amounts of available land and a skilled labour shortage, both the Government and the homebuilding industry need to change how homes are built if that goal is to be attained.

The Lyons Review, which was updated last year, recommended supporting the expansion of modern off-site manufacturing (OSM), another term for factory built homes. In its recent White Paper, the Government revealed initiatives to support this undertaking. They include:

OSM is essentially a type of home built off-site in a factory instead of on-site using traditional methods. Some forms of constructions use modular elements such as bedrooms craned in steel frames and bathroom pods. Others are systems in which wall, floors, and ceilings arrive on-site flat-packed.

OSM housing is widely regarded as a solution to a widespread construction problem. The UK government has been attempting to encourage manufacturing since 2010 with substantial financial support and widespread praise, so the growing use of OSM helps it boost both manufacturing and housing supply.


Other advantages to OSM housing include quicker delivery times and faster on-site construction, which lowers costs and wastage and results in more accurate costings and less disruption for any neighbours residing near the site. Opening a factory, requires substantial investment so consistent demand for OSM is important.

At present around 15,000 new UK properties are created using OSM every year, which accounts for close to 9.1% of completed new builds. This level has remained fairly stable for over a decade.

In 2015 housebuilder Persimmon increased its number of housing completions by 18% using its Space4 frame kits, which were manufactured offsite. This adds up to around 6,000 homes, or 40% of all UK OSM output. Persimmon’s offsite factory has the ability to produce 8,000 kits each year, and other prominent housebuilders are also working with OSM.

For many people in the UK, the concept of OSM is tainted by recollections of the prefabricated homes that were quickly produced after the Second World War and subsequently encountered problems. Fortunately, technology and the manufacturing process have advanced since that time and all OSM components and homes have been certified as defect-free.

OSM has been recently used in student accommodation, hotels, and private rentals. Many housing associations are also embracing the concept: last December Your Housing Group signed a £2.5bn joint venture with Chinese construction company CNBM to build 25,000 modular homes over the next five years.

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