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London needs modular housing revolution

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Experts have welcomed a major new report calling on the mayor of London to use his planning powers to kick-start a 21st century modular housing revolution.

In its report, out today (Thursday 31), the London Assembly says Sadiq Khan should create a standard design code for offsite manufacturing (OSM), designating public land and speeding up planning in a bid to help solve the housing crisis.

It says that using offsite manufacturing, homes for keyworkers could be built above Tube stations in weeks.

Government construction adviser Mark Farmer, whose report Modernise Or Die gave the industry a direct ultimatum last year, said today’s report “sends an unequivocal message to the Mayor of London that now is the time to show strong political leadership” in delivering an OSM revolution.

A lack of a single design standard or mass market demand has held back the sector’s growth, says the London Assembly, which believes the mayor could become a market maker by helping incentivise new development and build confidence from investors and lenders.

The report recommends that the mayor should:

  • Look at the potential of using TfL-owned land to stimulate the OSM sector;
  • Create a standardised manufactured housing design code to help drive scale and minimum quality standards;
  • Provide clear and strong leadership in the development of awareness of OSM’s potential and encourage the use of OSM to achieve wider strategic objectives;
  • Announce a further round of his Innovation Fund specifically focused on OSM;
  • Set up a London-specific fully pre-qualified OSM-led procurement framework.

Rory O’Hagan, director at Assael Architecture, which has worked with both Essential Living and Legal & General’s build to rent projects said: “Having a standardised design code will increase familiarity, lower barriers to entry for manufacturers and de-risk financing through advocating a design approach that unleashes the full potential of offsite technology.”

Mark Farmer, chief executive of Cast Consultancy and author of last year’s Farmer Review, said: “This timely report sends an unequivocal message to the mayor of London that now is the time to show strong political leadership to establish a mainstream precision manufactured housing market in the capital. It could underpin ambitions not just for housing, but for wider economic growth.

“There is also a great opportunity for the mayor to align with national policy and the growing cross party consensus on the role of offsite manufacturing as well as tying this into his separate ‘Skills for Londoners’ manifesto commitment and the Construction Academy Scheme initiative.

“Future skills in construction may look very different to what we currently see on a building site, and we should be planning ahead for this in London right now."

Christy Hayes, CEO at Tide Construction, currently the UK’s biggest OSM developer, and developer for Europe’s tallest modular building, Apex House, a student accommodation block in Wembley said: “The single most important thing needed for companies investing in OSM housing is certainty of demand.

“If, by becoming a market maker, the mayor can drive continuous growing demand for offsite manufactured homes, we will see significant investment in this sector which can only be good for everyone.”

The report says that “while not a panacea, OSM will be critical in bridging the gap between the numbers of new homes the traditional construction industry can deliver in London and the level of housing need that is anticipated in the next 20 years.

“Moving production from the construction site inside to a factory environment has many other benefits, especially in attracting a new demographic to the industry and diversifying the workforce. Being able to offer professional ‘careers’ in a permanent place of work should help the industry attract a broader pool of talent – especially women and young people.”

However, it points out, that “the full advantages of OSM depend on scale and continuity of demand. Few institutions are large enough to achieve this critical mass, but London lacks collaborative partnerships that can deliver at the scale required.

“Existing housing partnerships, or indeed organisations such as the G15, that might offer the basis of collaborative partnerships have yet to demonstrate a successful approach in London. For many stakeholders, there is an understandable degree of nervousness surrounding OSM. This approach to building requires a different way of doing business.

“The mayor is in an ideal place to deliver this leadership and there are a number of steps he could take to galvanise the delivery of more OSM housing in London.”

Sadiq Khan announced earlier this month that he would invest £25m into niche developer Pocket Living which increasingly is using offsite manufacture to build its homes.

Having a standardised design code will increase familiarity, lower barriers to entry for manufacturers and de-risk financing through advocating a design approach that unleashes the full potential of offsite technology.– Rory O’Hagan, Assael Architecture