Andrew Shepherd, managing director at TopHat, looks at modular housing as a solution to the UK social housing supply deficit
We are in the midst of a social housing crisis and shelter, the homelessness charity, reckons the UK has suffered a net loss of nearly half a million social housing units since 2000.
Add to this, a picture of ageing housing stock and industry-leading research showing waiting lists for social housing exceed 60% of the official council estimates, and you begin to grasp the scale of the problem.
Routine demolitions and the Right to Buy scheme have drastically reduced the social housing stock, without this stock being replenished through new development. Currently, the UK needs 150,000 new social housing units built every year to meet demand, and yet the average annual output stands at just 4.4% of that figure.
Put simply: the supply of social homes is not meeting demand and the last time the UK got close to building these sorts of numbers was in the 1970s.
To make matters worse, Savills estimates that the number of houses being built will not return to pre-pandemic levels until 2026 – and even then, volumes will still be significantly short of the 300,000-new-homes-a-year target.
The issues are multiple, an ageing construction workforce, limited availability of materials, a skills shortage, all of which make ramping up to deliver incredibly difficult. Therefore, innovation as a means of boosting the industry’s productivity levels has never been more important.
Traditional house building techniques are not sustainable. The construction process is often long and fraught with complications – reliant on too many variables; be they contractors, materials, or the weather. Moreover, with the construction sector facing a skills shortage, and the rising cost of staple building materials, meeting output targets becomes near impossible through traditional means.
With property prices continuing to rise, and the model of traditional home ownership becoming more inaccessible, alternative solutions are needed to protect the most vulnerable in society.
Modern methods of construction (MMC)
One such solution is through the adoption of modern methods of construction (MMC) to increase the output of social housing in the UK. MMC developments offer high-speed, sustainable solutions to narrow the gap between supply and demand.
One form of MMC is offsite modular housing, like that produced by TopHat. This form of construction employs precision-engineered techniques to produce homes in a factory, ready to be transported and installed on site. These high-quality modular homes can be produced and delivered in half the time of a traditional house, helping speed up the delivery of social housing within the communities they are most needed.
The high speed of these developments offer an affordable construction option for local councils, and ultimately a low-rent option for those in need.
However, focusing simply on low rental rates is too simplistic, and doesn’t account for the huge energy costs that most UK social housing incurs. For example, designed to future standards, all of TopHat’s homes achieve either ‘A’ or ‘B’ EPC ratings, avoiding the need for retrofitting and further costs at a later date. They are also cheaper to run than traditionally built homes.
These factory-built housing options offer councils the opportunity to tackle climate emergencies whilst simultaneously ramping up social housing output. This high-volume, quick alternative to traditional construction techniques minimises disruption, dust, noise and carbon pollution during the construction phase, and also produces long-term energy efficiency, lowering costs and environmental impact.
It appears the UK government is finally beginning to see the potential of MMC in solving the affordable housing shortage. Homes England has been championing modular housing as a solution to speeding up the delivery of affordable housing across the UK. Last year, the Government’s national housing agency announced that housing associations looking to sign deals under the new £11.5 billion Affordable Housing Programme will have to commit to using modern methods of construction to deliver at least a quarter of their pipelines.
Increasing social housing output requires a joint approach. Modular housing is not the silver bullet solution. Instead, it brings much-needed additionality to the market at a time when there are historic mismatches between supply and demand. Innovation will make housebuilding a more productive industry, so it is time we welcome it with open arms.
