Leaving the right legacy: will offsite construction ever deliver on speed, simplicity and quality? The London case

What role could – or should - offsite construction methods and modular building play in pushing forward the agenda for building modern housing stock?

With 66,000 new homes needed per year in London alone according to the capital’s Mayor Sadiq Kahn, this is a critical question. To try and find some answers, Turner & Townsend hosted a lively roundtable discussion as part of its recent “Real Estate Summit”, stimulating debate including industry experts from the GLA, British Land, the Policy Exchange and Ballymore.

The event addressed three key issues. Why could offsite/modular construction provide a solution to the housing crisis? What needs to happen to make this work? How do we ensure we leave the right legacy? Let’s look at each of these in turn:

Why could offsite or modular construction methods help?

As the housing crisis becomes more acute and population growth continues apace, it’s clear we need to build more homes more quickly. What isn’t necessarily clear is how. Traditional construction techniques take time, and with the skills shortage worsening, finding simpler, faster, high quality building methods is becoming imperative.

There is huge potential to harness the “lean” principles that have made such impressive productivity gains in the manufacturing sector to solve these capacity, speed and skills issues. However those who have been pioneering this in the construction industry have, by and large, not yet achieved the desired efficiency gains and cost benefits to make it commercially viable. Until that happens, widespread acceptance and adoption of the concept simply won’t gain any real traction. This begs the next question:

What needs to change to make it work?

Delegates had a wide variety of impassioned views on this question and an animated debate highlighted what industry experts perceive to be some of the biggest issues.

A major stumbling block is that the construction sector is dubious about the benefits and a large amount of scepticism exists. Concerns over quality versus speed remain, as do uncertainties over whether the supply chain is yet mature enough to deliver and how such a complex supply chain can be successfully integrated. The question was asked: if money is not being made, why invest?

Richard Daley from the Lean Management division at Turner & Townsend Suiko believes one key issue is that thinking and behaviours are still dominated by a traditional construction mindset. Many of the same processes are still used in the factory as on site, curtailing the potential efficiency savings of off-site production.

If modular is to work, he argued, the construction industry must learn lessons from manufacturing, such as streamlined car-building production lines, and adapt them to fit. An “easier, better, faster” ethos is required, creating greater collaboration, building efficiencies in from the start and solving problems at an earlier stage.

Delegates also largely agreed that there is an important role here for central government, local authorities, clients, architects, housing associations, the private rental sector and landowners as well as developers to drive change.

Michael Payton from the GLA’s view was that from a planning perspective, the desire is certainly there to push modular building forward – as long as the quality is high and the required standards can be met. 

Careful consideration needs to be given to the end product, to ensure it is sufficiently attractive to consumers and in particular to ensure it has the resilience to meet modern life time requirements.

Planning policies need to be fit-for-purpose, however. To get to the required numbers of new homes there must be a different way of thinking around scalability, but densities also need to be considered. After all, the point was made that people do not want boxes to live in – they want homes.

So while a targeted planning strategy and central government policy impetus could set modular building in motion, demand from the public also has to be there. Selling it as a desirable concept is key. Whether architects could take the lead by coming up with appealing designs which can be assembled off-site, or whether it’s engineers that need to supply suitable solutions is a moot point. But whichever it is, careful consideration needs to be given to the end product, to ensure it is sufficiently attractive to consumers and in particular to ensure it has the resilience to meet modern life time requirements.

How can we ensure we leave the right legacy?

This brings us to the final question about legacy. Delegates felt that the public perception is that modular means temporary, disposable even: an image problem that needs to be addressed if off-site construction is ever going to get off the ground. It begs the question of how long we should expect these buildings to last these days, and whether residential property would ever follow the commercial model, which tends to have a far shorter lifespan before renewal.

However, the flexibility of modular building offers significant advantages which should not be overlooked. Spaces that can adapt over time to fit occupiers’ changing needs could prove to be the USP the industry needs to sell homes constructed off-site to the public on any meaningful scale. This could solve the problem of how to provide mass-produced homes that people really want to live in – because they would have the opportunity to customise them to suit their individual requirements at any given time in their lives, and put that all-important “personal stamp” on their homes.

So demonstrating the value of the product to consumers and policy-makers is important. But an offsite construction approach also has to work from an industry point of view and commercial drivers cannot be ignored. Developers need to be motivated and incentivised to want to achieve the right product, and more investment is urgently required. However, how to achieve the volume that will make modular viable remains a critical concern. The construction industry is in some ways facing a catch-22: while economies of scale are vital to make such an approach work financially, is it really possible or desirable to erect new homes at the rapid pace factories would need to produce them?

It was pointed out that some other countries like China are more advanced in using modular techniques, so perhaps we should be asking what we can learn from them and how we can use their innovations to our benefit. This shouldn’t undermine a desire to support a “Made in Britain” ethos: done right, a move towards modular manufacturing in the UK could be a much-needed source of job creation here.

Speed, simplicity and quality are key – and modular has the potential to deliver, but there are many hurdles to overcome before widespread off-site construction becomes a reality.

Where do we go from here?

Clearly the debate still has some way left to run as the industry weighs up the feasibility and advantages of off-site and modular construction. In one area, however, there was a strong consensus: that legacy needs to be part of the brief, as it was with the London 2012 Olympics, and that government and public policy needs to drive the agenda.

After all, the recently announced Budget target of 300,000 new UK homes a year will never get built without radical, innovative solutions! Speed, simplicity and quality are key – and modular has the potential to deliver, but there are many hurdles to overcome before widespread off-site construction becomes a reality.

Overall, experts at Turner & Townsend’s event agreed that offsite construction and modular buildings could make a significant difference to solving the UK’s acute housing needs – but we are not ready yet. Momentum is gaining, the quality is (broadly) good enough and such an approach could deliver many benefits, but demand from government and the public is lacking and the commercial drivers for the construction industry are currently weak. Much more needs to be done to create a real impetus for change. It may still take some time for the tipping point to come.

For further information, contact:

James Hamilton