Is There a Future for Factory-Built Homes?

iB Architects 02 July 2024

In the quest to meet the UK's burgeoning housing demands, factory-built homes, also known as modular or modern methods of construction (MMC), present a promising solution. According to TALO, a leading MMC provider, these methods could transform UK construction and eradicate fuel poverty. Their innovative approach and robust technology might just be the key to addressing the nation’s housing crisis. 

TALO’s MMC system exceeds PassivHaus standards with a fabric-first approach, minimising the need for additional technologies. Their background in building oil rigs in the North Sea—a challenging environment—has given them a unique perspective on construction efficiency and durability. While an oil rig takes eight months to build, houses in the UK take much longer, a discrepancy Talo aims to address. 

TALO’s construction process is entirely dry, shielded from weather until the structure is watertight. This not only speeds up the build but can also reduce preliminary costs by up to 60%. Recognising the unsustainability of massive factories, TALO plans to establish smaller regional factories, enhancing flexibility and scalability. 

Their homes exceed Passivhaus energy standards and can become carbon negative with the addition of solar panels. Recently, a TALO-built house was sold at a 20% price premium over a traditionally constructed twin, underscoring the market’s recognition of their superior quality and performance. The high airtightness and thermal efficiency of TALO homes mean they can operate with solar panels and battery storage, eliminating the need for costly air source heat pumps. 

Despite the advantages, several key issues must be addressed to change the UK's cultural and traditional mindset towards MMC. These include planning, procurement, and regulations. 

One perceived problem with MMC is the flexibility of design, with concerns about how these homes can meet local planning requirements and vernacular. However, most housebuilders follow pattern books that vary little, and homes must adhere to Nationally Described Space Standards (NDSS). Essentially, the design variations often boil down to cosmetic changes. 

MMC requires meticulous control throughout the process. Ideally, an MMC provider should be involved early to ensure that the planned homes can be delivered as designed. However, clients often hesitate to commit to a specific supplier early in the procurement process, restricting innovation. Housing associations typically procure main contractors on a four-year framework cycle, and rarely include MMC suppliers. TALO suggests a partnership model between an MMC provider and a housing association to mitigate procurement risks and deliver homes efficiently. 

The regulatory landscape also needs to evolve. Homes England mandates that 25% of homes delivered must be MMC, but this includes a wide range of categories, from complete turn-key units to simple timber frame constructions, which are more closely aligned to traditional methods. A clearer, more supportive regulatory framework is necessary to maximise MMC’s potential. 

The likely incoming government promises 1.5 million new homes over the next parliament. While large UK housebuilders control the major strategic sites making MMC adoption on these scales challenging. MMC could be better suited to smaller sites, as councils and housing associations own numerous underutilised small sites, such as garage plots, where MMC could significantly increase housing delivery on brownfield land. 

If all MMC providers combined efforts, they could potentially deliver 300,000 homes annually. However, the cumulative shortfall in housing delivery suggests the actual need is closer to 500,000 homes annually, making the target of 1.5 million homes extremely ambitious without systemic changes. 

MMC projects are cash-intensive early on, necessitating a different financial approach compared to traditional construction, which spreads costs over a longer period. Despite the higher demand and overflowing housing waiting lists, the current system favours the slower, less intense funding requirements of traditional methods. 

Smaller sites, such as garage plots within existing settlements, offer a politically and practically viable solution. These infill sites minimise the impact on local infrastructure and can be made viable through TALO’s innovative foundation system, which works similarly to a railway’s load-spreading principle and can be placed on contaminated land once it is capped. 

The legacy of post-war prefabricated buildings has tainted the perception of factory-built homes, with many viewing them as inferior to traditional construction. However, modern MMC homes offer superior quality, precision engineering, and long-term durability. The issue often lies in the lack of skilled labour, with tradespeople not fully understanding the intricacies of MMC, leading to mistakes. 

In Scandinavia, contractors require national certification, ensuring high standards and accountability. TALO plans to implement a similar approach in the UK, training factory workers with backgrounds in precision industries like automotive manufacturing. 

Adopting MMC requires a new business model and financing approach. Traditional lenders release funds at key construction stages, which do not align with the MMC process. A joint venture between housing associations and MMC providers might be the best way forward. The industry needs to advocate for MMC's benefits, emphasising cost and program certainty, improved customer service, and reduced energy costs. 

For MMC to thrive, several systemic changes are necessary: 

• Updating SAP Calculations: Current SAP calculations penalise the use of electrical underfloor heating, which is crucial for TALO’s carbon-negative homes, as it does not recognise that electric underfloor heating, hot water and cooking is run by solar panels and stored in battery bank 

• Holistic View: A comprehensive understanding of the built fabric, regulatory processes, procurement, and funding is needed to shift away from short-term perspectives. 

• Regulatory and Incentive Reforms: Clearer regulations and incentives for MMC adoption are essential. 

Despite the broken planning system, indecisive government housing policy, and the control of land by large housebuilders, MMC offers a viable solution to the housing crisis. The MMC community must continue to advocate for quality and innovation, challenging the status quo and driving systemic change for a sustainable housing future.