In this article, we explain the concept and history of modular house-building, before investigating its advantages and disadvantages in today’s housing landscape.
What is Modular Housing?
The term applies to new homes which are built in sections in a factory using precision technology; the sections are then transported to the build site and constructed on a pre-made foundation. Modular homes are being scrutinised as one option for alleviating the UK’s housing crisis; the off-site construction method takes half the time of conventional building and costs are lower.
The Government has modular construction firmly in its sights as a means of increasing the pace of housebuilding and creating good quality, energy efficient houses. Homes England, the Government’s housing agency, is carrying out research and investing in modular building by partnering with specialist firms to build homes.
Advances in modular housing
Modular housing is not a new approach, having been used at various points in history when a need for rapidly-built houses arose, such as during the post-war boom in the UK and USA when shortages of steel and labour were experienced, however, the demand was not sustained. Now, digital tools and lighter-weight materials are changing perceptions of modular housing, making it more appealing to home buyers, and the method could become a significant market disruptor (McKinsey, 2019).
Head of Construction at the Royal Institution of Chartered Surveyors (RICS), Alan Muse commented that Modern Methods of Construction (MMC), the technology behind modular house-building, are one solution to boosting housing numbers in terms of certainty of delivery and quality of finished product. He said:
“Modern Methods of Construction can be a complete solution, i.e., a fully pre-fabricated building, or a part-solution, involving off-site construction,” he said. “With traditional construction, there is often a lack of skills, the resulting house is late and not to the required quality. MMC accounts for 3-4% of the UK construction industry and the government is keen to increase this percentage.”
“Other countries such as Scandinavia and Germany have a higher rate of MMC, so we can see how they are achieving progress. At RICS we are keen to see improvements in construction and technology.”
Mr Muse pointed out that there are issues with transporting modular homes as more carbon is involved which is a disadvantage. He said that they work best in rural or semi-rural areas, especially schools and hospitals, where there is space to bring the modular components together, rather than on an urban building site, where logistics involving cranes and transport lorries are a problem. He added:
“MMC is also useful in refurbishment and renovation work, and allows for adapting existing housing stock; there is a drive to adapt our town centres to residential housing and MMC can come into play here. It also helps with capacity, skills shortages and takes away on-site risks such as weather. The more industrialised construction becomes, the more risk is reduced.”
Mr Muse commented that in the UK pre-fabricated buildings have unfortunate connotations, but this is a cultural issue which will change with the quality, look and feel of more highly engineered houses.
Property commentator Tim Kampel, director of Box Property Solutions Ltd., is also impressed by the potential of modular building which he says is cheaper, more energy efficient and of high construction quality. He added that, crucially, mortgage availability for this type of housing is now improving. Having toured a modular house-building factory, Mr Kampel said:
“The homes can be sized to suit and modules can link together; the house is built in the factory where the plastering, insulation, electrics and lighting systems are all installed and kitchens and bathrooms are fitted and tiled. The house is then clad in brick which is half the thickness of standard brick, or rendered, all in the factory. The work is checked before it leaves the factory to ensure high standards are maintained.”
“Foundations can cost around £8,500, which can either be dug or comprise a floating slab. The only risk is transport damage, and it takes around two days to site – or `stitch in’ – a modular home. They have a 12 year warranty, more than the 10-year National House Building Council (NHBC) warranty – and the steel frame is guaranteed for 60 years.”
Mr Kampel gave as an example, a three bedroom semi-detached house which could cost £109,000, plus the cost of the land and building time. He said that as the houses look like conventional new-build homes, they could change peoples’ inbuilt preconceptions about pre-fabricated buildings. Mr Kampel added that another advantage of modular construction methods is that houses can be picked up and moved to a site in another part of the country if required. The modular construction model is already being used by Premier Inn and several other large companies along with hospitals.
Advantages of Modular Construction Methods:
Modular buildings cost less than traditional buildings, depending on factors such as materials, design and location. The lower costs mean that they can provide buyers with a first step onto the housing ladder. Modular homes may be a useful option for local authorities which need to quickly provide affordable housing options.
The standardised design means that modular construction is far quicker than traditional building methods, making it a less costly option. The speed of implementation means a shorter investment time, therefore lower costs for any investor and more homes can be built within a budget than traditional builds. Windows can be fitted, internal walls can be plastered and even bathrooms and kitchens can be put in place in the factory, ready for connection on site (This Is Money, 2021). The rapidity of off-site construction reduces overheads and construction management costs: it can take up to 50% less time to build a home, (McKinsey, 2019). The factory-built model also eliminates delays caused by bad weather as sections are mainly constructed under cover, reducing the number of construction days lost to bad weather.
Eco-friendly materials can be used in the construction and modular sections use less power to produce. Off-site construction involves less waste due to the precision manufacturing process, resulting in a lower carbon footprint. Modular homes can be installed with the latest environmentally friendly technology such as solar panels and ground source heat pumps, making them highly insulated and airtight, reducing bills, making the option attractive for affordable housing developers. The cost of green improvements is predicted to fall which may enable the modular format to become mainstream as a way of decarbonising housing stock at scale, helping to meet net zero carbon goals (This Is Money, 2021).
Lower utility bills can be achieved as a result of energy efficiency measures; some models are being made with zero-carbon capabilities, offering buyers the possibility of zero energy bills. Modular homes can also achieve high EPC ratings, adding to their environmentally friendly appeal.
Construction does not require a highly skilled workforce, offering job opportunities for unskilled workers on production lines (Building Products, 2018). The factory construction model also removes the need for contractors to travel long distances to building sites.
The building industry generates high quantities of waste; factory-built products are efficient as it is easier to calculate the amount of material needed and less is stolen from site. Purchasing volume creates discounts on materials, however, modular buildings require more construction material than conventionally-built homes as they must be reinforced for delivery to site.
The extra reinforcing measures which enable the sections to be transported result in a strong product; the fact that they are precision-engineered adds to durability.
Sound insulation qualities can be superior to those found in traditional buildings. As each module is a separate construction, when connected, the modules are protected from transferring noise from one to another.
Modular buildings can be used as emergency accommodation, being portable and quickly erected. They can also be a useful option in remote areas and disaster zones.
Specialist software can allow for the creation of bespoke modules.
Disadvantages of Modular Housing:
This is a relatively new market; lenders are cautious about offering mortgages on prefabricated buildings which are classed as `non-standard construction’. Homebuyers seeking a mortgage for a modular home may find few options and face higher costs, however, if the building firm has relevant accreditations it helps. Obtaining insurance may also prove difficult, depending on the construction materials; specialist insurers exist but choice may be limited (This Is Money, 2021).
Potential buyers may have concerns over quality control construction guarantees. Peace of mind may be offered by the BOPAS (Buildoffsite Property Assurance Scheme), a risk-based evaluation that can be used to show lenders, valuers and purchasers that homes built from non-traditional methods and materials will last for at least 60 years (Bevan Brittan, 2018). It is also possible to obtain 10-year NHBC certifications.
Some areas have restrictions regarding the type and design of house that is permitted.
While the value may appreciate, a prefabricated building may deter some buyers.
Do you think that modular homes are the way forward?
Let us know your views about whether this new approach is the best way to get more homes built quickly, by sending us a comment.
McKinsey. 2019. Modular construction from projects to products. [Online]. Available from: https://www.mckinsey.com/business-functions/operations/our-insights/modular-construction-from-projects-to-products (Accessed 4th October 2021)
This Is Money. 2021. Goodbye bricks and mortar. [Online]. Available from: https://www.thisismoney.co.uk/money/mortgageshome/article-9745083/Goodbye-bricks-mortar-visit-factory-pumps-two-houses-day.html (Accessed 1st October 2021)
Building Products. 2018. Are modular homes the answer to the UK’s housing crisis? [Online]. Available from: https://buildingproducts.co.uk/are-modular-homes-the-answer-to-the-uks-housing-crisis/ (Accessed 1st October 2021)
Medium.com. 2018. Advantages and disadvantages of modular homes. [Online]. Available from: https://medium.com/@piotrgoawski/advantages-and-disadvantages-of-modular-homes-3592799ea (Accessed 1st October 2021)
BBC. 2021. Shetland fires should act as a warning to the modular building industry. [Online]. Available from: https://www.bbc.co.uk/news/uk-scotland-north-east-orkney-shetland-57942459 (Accessed 1st October 2021)
Bevan Brittan. 2018. Modular homes. [Online]. Available from: https://www.bevanbrittan.com/insights/articles/2018/modular-homes-can-they-help-solve-the-housing-crisis/ (Accessed 1st October 2021)
GOV.UK. 2021. Ground-breaking partnership delivers first modular homes at Northstowe. [Online]. Available from: https://www.gov.uk/government/news/groundbreaking-partnership-delivers-first-modular-homes-at-northstowe (Accessed 4th October 2021)