Driving forward off-site manufacturing

How do we solve the housing crisis?

It’s a complex question that has permeated the media and political debates for at least the past two decades; the 2016 Farmer report challenged the construction sector to ‘modernise or die’. Britain’s chronic housing shortage, where rising costs have outpaced a supply of affordable homes, is one of the biggest economic, political and social challenges of our time.

Barriers including an undersupply of funding, limited land and lack of skills are difficult to overcome, particularly with Brexit on the horizon. However with an increasing demand for decent, reasonably priced homes – approximately 8,500 families in Wales have been on the housing waiting list since 2009 – there’s pressure on the housing sector to find a sustainable solution to the crisis.

In Wales, the Welsh Government has committed to delivering an extra 20,000 affordable homes by 2021. Not only that, as a sector, we launched our ‘Housing Horizons’ vision in November 2017 with a pledge to double housing associations’ delivery rate by 2036. That equates to 75,000 homes and 150,000 jobs. It’s a big challenge – but it’s vital we achieve this. Having access to good housing should be a basic right for all and the sector is committed to building on the work we already do to ensure we deliver on our ambition.

But with the aforementioned obstacles in our way, how can we reach our ambitions while being both cost effective and efficient? To find a sustainable solution we need to innovate – in delivery pathways, but also in construction methods.

An effective model that is being explored is off-site construction. In other words, planning, designing, fabricating and assembling building elements at an off-site location – such as a factory – to ensure rapid, accurate and efficient construction of a permanent structure. This modern method of construction (MMC) is being embraced in the sector. A recent LHC and Inside Housing survey conducted with 96 housing representatives showed 59% percent of housing associations from across the UK are planning to develop homes in the next three years using off-site methods of construction.

While the number of social landlords initiating off-site construction methods is still minimal, with many approaching it tentatively, there’s an appetite in the sector to use this as a way of delivering high-quality homes. How to do this at the scale and pace we need to deliver on our ambition is one of the key questions we need to answer.

While the numbers of homes constructed off site have traditionally been low in Wales, we are beginning to see some positive growth in the industry.

F1 Modular, an off-site manufacturing facility based in Newtown, employs 48 multi-skilled workers who work on a production line manufacturing modular units from frame to shell to fully-fitted home. The company – which has a full in-house team of CAD (Computer-aided design) specialists –- works to clients’ specifications, ensuring the type of precision and quality that limits both wastage and remedial work. These are huge benefits; around 24% of the UK’s waste currently comes from the construction industry, and remedial work (almost inevitable when using traditional methods) is costly and inconvenient.

The direct correlation between efficiency and cost savings was apparent when Swansea Council ran a pilot scheme of 18 new timber frame homes designed to Passivhaus standards, as part of the More Homes project. Simply constructed design choices had a big impact on cost and fuel bills were 70% lower than they would have otherwise been. The council is now planning to run a second scheme, including a new ‘Swansea standard’, building on their supply chain and workforce.

There’s a clear willingness in the sector to use modern construction methods to generate a higher supply of homes. At the recent Off-site Manufacturing Workshop at Cardiff Metropolitan University, John Skivington, Director of the LHC, said the majority of registered social landlords surveyed think off-site construction methods will be ‘very important’ in the coming years. The survey statistics also reveal that, by 2020, 51% of respondents expect their organisations to be developing 1-30% of their total homes using off-site. In addition, 10% expect to be delivering between 31-100% of their homes using off-site construction.

The appetite and enthusiasm in the sector for innovative construction methods is apparent – so what’s holding landlords back?

According to the LHC statistics, almost half surveyed cited a lack of information and understanding as a barrier. Put simply, people are unsure of the available options and systems, and how they can work in practice.

Risk aversion is also another issue. In the current climate it’s understandable that many may be reluctant to try something new. Manufacturers are also wary of investing in equipment and facilities when they may feel there is little guarantee of a decent return on this. We’re in a rapidly changing political environment where budgets are being squeezed and the future is uncertain. Priorities may change, pipelines are not guaranteed and demand may dwindle.

So what now?

There is a need for direction, guidance and unity. The recent Off-Site Manufacturing Workshop hosted by Cardiff Metropolitan University, at which both barriers and best practice examples were shared, sought to begin this process – but more certainty is needed if real action is to be taken. The Welsh Government’s Innovative Housing Programme fund, which was recently increased, gives us an opportunity to speed up the delivery of homes and trial new housing models more confidently. The LHC data identifies hurdles in the way of progression, but many of these can be solved through partnership working and robust planning. We need all parties, including politicians, housing associations, contractors, consultants and manufacturers, to come together and develop a plan that gives landlords the information they need, and a standardised model for processes and specifications. As mentioned, Cardiff Met have begun this process, but arguably more input, support and funding is required from Welsh Government.

It’s crucial that, as a sector, we lay the foundation to enable housing associations to achieve more – and quickly. Following the launch of Housing Horizons we called for a review of the affordable housing policy in Wales, and would like to see even more ambition and improved collaboration. This will help us reap the benefits the sector brings, not just to communities, but the economy too. Our Socio-Economic Impact report for 2016/2017 showed £267m was spent by Welsh housing associations on repairs, maintenance and upgrading existing stock in 2016/17.

We are now working with the Welsh Government to drive forward the review and, as part of this, will explore establishing the appropriate mechanisms to support off-site manufacturing. Once we have a clear direction we can then give social landlords the tools to reach their full potential.

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