Could London’s housing crisis be eased by an off-site manufactured (OSM) housing revolution?
An ambitious report addressing housing, construction innovation and economic growth strategies was announced at the tail end of August 2017. Published with little fanfare, it quickly caught the attention of the housing and construction industries and the media, largely down to the report offering important recommendations that, if implemented, could help solve London’s housing crisis.
⬇️ Read the report, ‘Designed, sealed, delivered: The contribution of offsite manufactured homes to solving London’s housing crisis’
It is broadly accepted that not enough new homes are being built to meet increasing demand — London faces a housing crisis. Hardly a week goes by without the capital’s housing hitting the headlines or an idea proposed to solve the lack of it. As Sadiq Khan pointed out in his 2016 manifesto London needs (at least) 50,000 new homes annually. An innovative approach is required if we are to reach this target.
That is why, on behalf of the London Assembly’s Planning Committee, Londonwide Assembly Member and Chair of the committee, Nicky Gavron, sought to explore whether the capital could lead an off-site, precision manufactured housing revolution to close the gap between supply and the homes that Londoner’s need. This report urges Mayor Khan to take the lead.
The report outlines a number of reasons why OSM is good for London. Here are just a few of them:
- The wide variety of homes that OSM now produces can meet the needs of all Londoners: families with children, older people and single households. The business model is particularly suitable for rental accommodation at all income levels
- Their shallow foundations, lightweight construction and acoustic performance lend themselves to constrained sites, such as those with tunnels below or next to railway lines, as well as decking over other sites
- OSM buildings can be built and occupied in half the time of conventional buildings, requiring fewer vehicles to transport materials to site, which massively reduces traffic, pollution, noise and disruption, in turn improving local air quality
- OSM homes work for a range of densities, whether on large-scale developments or small infill sites between existing buildings
A change in mindset
The last time we were anywhere near reaching house building targets was in the early 1970s. The preceding decades saw the number of off-site buildings significantly increase in volume. In fact, the ‘prefabs’ developed to bridge the gap during that period went a long way to increasing much-needed supply. In 1968 alone, in excess of 425,000 homes were built. In the late 1990s, a certain John Prescott somewhat ill-fatedly encouraged the industry to push ahead with prefabricated buildings too.
‘Today’s off-site manufactured homes are characterised by their high quality, precision, digital design and eco-efficient performance, truly twenty-first century homes.’ — Nicky Gavron AM, Chair of the London Assembly Planning Committee
Since then, though, those ‘prefabs’ have instilled in us a degree of caution having often been beset by stories of leaks, damp and rot — they have become synonymous with poor quality, and the technology, dampened with a bad image. Trust in this method of construction diminished and the technology fell out of favour.
Penning the foreword to the report, Ms Gavron wrote, ‘Today’s off-site manufactured homes are characterised by their high quality, precision, digital design and eco-efficient performance, truly twenty-first-century homes’. Just as you wouldn’t build a car in a field, this modern method of construction (MMC) shares more with the rigorously tested, factory controlled, high quality and innovation we have come to expect from the automotive industry than it does with early iterations of OSM technology.
Being digitally designed and precision-manufactured off-site, build conditions are consistent, quality is controlled and an increased speed of delivery achieved. Crucially, these characteristics of the OSM manufacturing process distinguishes it from its ‘prefab’ forebears.
London, a victim of its own success?
Mayor Sadiq Khan has been wise to push the ‘soft power’ message that #LondonIsOpen, for London is outward looking, diverse and will continue to be so, albeit rather optimistically and in spite of Brexit. Few will argue against London’s ability to remain an attractive proposition when it comes to doing business and as a place to live — both, of course, go hand in hand.
But for whom is London good for if it is not accessible and affordable to all its inhabitants?
Insufficient housing in London has led to rising house prices, higher rents, overcrowding and homelessness. Whilst home ownership continues to be the tenure of choice, the lack of affordability in the market, a vastly diminished social housing stock, combined with a growing population and, consequently, a greater dependency on the private rented sector, increasing numbers of Londoners are opting to leave — casting London’s competitive edge in the U.K. and global economies into jeopardy.
There, too, are the concerns of employers, particularly when it comes to productivity. As Lord Bob Kerslake, former head of the civil service and the permanent secretary at the communities department points out, business groups are quick to highlight the high cost of property in London as a major obstacle to recruitment. With increasing numbers of people being forced into even longer commutes, having vacated London for cheaper housing, productivity is suppressed.
Addressing London’s housing shortfall is essential if we are to ensure London retains its footing as a leading global city.
Uncertainty as we withdraw from the E.U.
At some point in the not too distant future is the daunting prospect of the U.K.’s departure from the European Union. The economy is already slowing, consumer and business confidence weakening, and we are due a recession. As The Farmer Review points out, we are set to lose over 600,000 of the domestic workforce to retirement by 2026. Moreover, the loss of E.U. workers due to Brexit poses an increased threat to housebuilding. Given the particular challenges these factors create, the Farmer Review suggests it is time to ‘Modernise or Die’.
‘The real ticking ‘time bomb’ is that of the industry’s workforce size and demographic. Based purely on existing workforce age and current levels of new entrant attraction, we could see a 20–25% decline in the available labour force within a decade. This scenario has never been faced by UK construction before and would be a capacity shrinkage that would render the industry incapable of delivering the levels of GDP historically seen.’ — The Farmer Review of the UK Construction Model, p.10, 2016
Whilst Mayor Khan’s reassurances to business, workers and tourists that London is open are genuine, the issue remains that London needs both the skilled and low-skilled to service it. On the latter, without lower skilled migration, the question remains: how are we going to build the homes London needs? Besides, if leaked Home Office papers touting plans to curb E.U. workers coming to the U.K. ring true, a skills and workforce problem becomes an inevitable crisis.
Interestingly, though, compared to traditional methods of construction, the report notes that OSM is far better suited to the challenges of a declining labour force and current reliance on E.U. workers in London’s construction workforce. LHC provided written evidence to the report, estimating a reduction in labour requirement in the region of 25 per cent (using timber frame construction), while Vision Modular, in their submission, disclosed a 75 per cent reduction using modular techniques.
‘While off-site construction methods currently account for less than 10 per cent of total construction output, there is widespread acceptance that this new approach to construction is an essential part of tackling the housing crisis.’ — Mayor’s London Housing Strategy, September 2017
⬇️ Download the Mayor’s Draft London Housing Strategy
A unique opportunity
As well as meeting the housing challenge, OSM is well placed to meet a variety of the Mayor’s wider strategic objectives: unlocking stalled and ostensibly difficult to develop sites; in terms of skills and jobs; reducing fuel poverty, and in meeting carbon reduction targets.
It is the mayor’s unique strategic position and the powers he holds that many contributors to the report are agreed allows him to be truly radical about the way housing is delivered in London. There is a firm belief that bold political leadership is required, though, and that Sadiq Khan, with policy and collaborative levers at his disposal, is best placed to, not just galvanise the sector, but also assist a national economic strategy whereby London is the engine room as homes are built for it by workers in other areas of the country. And, as Ms Gavron’s report suggests, to get a model established in London, at the required scale, is to create a template for other major U.K. cities.
Moving from the construction site to a factory has the potential to both up-skill and diversify the workforce, attracting a new demographic to the industry. A digitally driven professionalisation of the sector could create new design and production skills in a permanent place of work, attracting women and many more young people the industry is desperate to take on. OSM provides the basis for attracting, retaining and refreshing the talent the sector needs.
What the construction and housing sectors need most is bold political leadership
In September 2017, the mayor announced his draft Housing Strategy, setting out the proposed intervention he would like to make in the land market. In this document, the mayor makes clear his support to OSM and to the factories that could make them. OSM is given further support as the mayor goes on to focus his attention on City Hall purchased land and the setting of housing targets for London councils. These councils will likely bring into play a variety of sites to the market, including small ones, that OSM building techniques will lend itself well to.
The scale of off-site manufacturing is in the mayor’s gift. If utilised well, it would help to demonstrate that London truly is a city for all Londoners.
📢 Have your say
The mayor has launched his Draft London Housing Strategy. Londoners and organisations in the city are being asked to feed back what they think, particularly on what the mayor could do to achieve even more. Have your say HERE.
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It has been very fulfilling contributing to the report and findings in ‘Designed, sealed, delivered’. Next up, the new London Plan.
