For the UK to be successful at overcoming the chronic housing supply shortage, the industry needs to look beyond traditional forms of construction
The requirement to fill the supply and demand gap of over 100,000 homes needs to be met with housing that is both sustainable and cost effective. If the industry embraces offsite or non-traditional forms of construction we could find our solution.
Non-traditional construction systems, also known as offsite manufactured (OSM) or modern methods of construction (MMC), essentially refers to any form of construction method outside of the traditional bricks and mortar route. Prefabrication in a factory setting is by no means a new concept and the benefits are clear; speed of construction, reliability of materials and manufacture, improved performance and a potential reduction in construction costs.
It is becoming increasingly clear that traditional house builders alone are not going to be able to bridge the supply gap.
The first problem is the desperate lack of materials in the housing industry. Only a small proportion of brickmakers survived the collapse of the UK housebuilding market during the global financial crisis of 2007/08 and now that we are seeing a return of momentum to the construction industry the stock of bricks is failing to keep up with demand. With delivery times now reaching anything up to 60 weeks, the backlog has huge repercussions – pushing up costs and leading to delays in the construction process.
Britain is also currently facing the biggest skills shortage for a generation with estimates showing that the construction industry needs 35,000 new entrants just to stand still. With a huge shortage of skilled workers in the UK, building firms are having to fork out up to double the wages for tradesmen from abroad, increasing the cost of traditionally built homes.
Traditional house builders know what their customers want and are unlikely to transition fully to non-traditional forms of construction. While they may engage with the concept on the periphery, the real growth area for offsite methods will be the burgeoning private rented sector (PRS). We are seeing the sector start to take off in London: a quarter of Londoners are already living in the PRS and this figure is expected to overtake owner occupied within the next decade. Most of these PRS developments coming to market are repeatable and this model ideally suits the OSM industry. Furthermore, funding in this sector will come predominantly from institutional investors, looking to invest in secure large scale developments, where the economic benefits will be matched by the consistency and sustainability that offsite manufacture provides.
One of the main advantages of OSM is quality. In the UK, buildings currently fall short by up to 30% in terms of how they were originally designed to perform. Properties built in a factory will have a higher level of quality control compared with a construction site, improving the performance of the building over time. This improved performance from offsite techniques will translate into reduced energy and maintenance costs of the building.
While the benefits of MMC and OSM are clear in terms of providing housing that is both sustainable and cost effective, it doesn’t come without its challenges. Concerns around systematic failure, fire spread and water ingress, both during the construction phase and after completion, have been raised around the use of offsite techniques.
Now a new scheme has been implemented to address these concerns. The BuildOffsite Property Assurance Scheme (BOPAS) provides long term assurance to mortgage lenders, valuers, funders, landlords and homeowners that properties built from non traditional forms of construction will be durable for at least 60 years without the need for disproportionate maintenance.
BOPAS, which was launched on 26 March 2013, was developed by Buildoffsite, Lloyds Register and BLP Insurance in conjunction with RICS, the Council of Mortgage Lenders and the Building Societies Association. The BOPAS process from inception through to construction gives an independent assessment of quality and reassurance for investors, developers and owners.
Given the reassurance that BOPAS provides, offsite manufactured systems and other innovative construction methods are well positioned to be the sustainable and cost effective solution to the increasing shortage of housing supply.
Jeff Maxted
Director of Technical Consultancy
BLP Insurance
Tel: 020 7204 2424
