The UK construction sector is a strategically significant part of the UK economy. Representing around 6% of GDP and 10% of employment, every year an estimated £150billion is invested through the public and private sectors.
The sector has been struggling to meet growing demand for its services in residential, with the Government’s target of 300,000 new homes per year unlikely to be met.
The stage is set for offsite homes to achieve scale. The concept has potency in the generation of a new model of home design, selection, and consumption especially in the submarkets of ageing population, social housing and build to rent. As offsite is more adaptable/ customisable housing authorities can also build more housing to meet the requirements of different participants, such as those with disabilities or the elderly.
It is also being increasingly utilised in the build to rent industry as the customisable nature allows for standardisation, increasing yield and reducing voids and costs to users, as well as specification fit-out for frequent tenancy turnover including wider doorsets and cassette replacements. Offsite is able to deliver on ‘whole of life’ housing and its ability to be able to adapt and to be recyclable can serve them across many differing life stages.
The four accessibility elements of a house that makes them age and wheelchair friendly (level access to entrance, flush thresholds, wide door sets, and a bathroom at entrance level) are also elements that make for a good family home, especially those with young children and pushchairs. Traditional builds are generally not built with the four elements of accessibility and their upkeep means that adaptions to make them fit for an aging population are often of great cost.
Investors and lenders must engage with the sector to recognise and calculate the long-term value of products. Improved integration and collaboration between lenders and builders – through schemes like BOPAS – will help lenders better understand products and build confidence in the quality, durability and marketability of the product.
Regardless of tenure, investment approvals must become systematised, like mortgage approvals for second-hand property despite, arguably, resales having a greater risk profile in regard of the three criteria; quality, durability and marketability.
At the moment, the second-hand home sales process is clear and lenders have tolerances for bulk retail lending. Chartered surveyors and valuers also have a key role to play, and must add knowledge of MMC technologies, especially regarding their durability and cost in use, to their reporting skillset. RICS are therefore updating its guidance to reflect this by producing a new home survey standard to be released in autumn 2019 and updated valuation guidance.
Digitisation may be deployed both in the production process to achieve precision engineering and assembly. BIM and digitisation has the potential to transform stakeholder confidence in the product including that of investors, manufacturers, builders, surveyors, lenders, insurers, managers, and, of course, consumers. Through BIM, Prop Tech, big data, AI and the ‘internet of things’, performance can be tracked throughout the building’s life.
This means there is continuous data from design, manufacture, build, and management, which can feed back into design. Government and industry must work together on the creation of apprenticeships and training products that support the rollout of offsite and encourage new entrants into construction. This must be funded and otherwise enabled strategically, including the encouragement of SMEs.
This requires resourcing and incentivising new delivery agencies such as local authorities, local housing companies, special purpose vehicle’s (SPV’s) and joint ventures to recognise and utilise emerging technologies. While offsite is not a panacea that will resolve all the problems in the sector, once fully embedded, will go some way to improving our capacity to meet need.
