Housing: Offsite Manufactured Housing

Monday 20th November 2017 Lords Chamber

Question

14:52

Asked by

[Lord Kennedy of Southwark]

To ask Her Majesty’s Government what assessment they have made of the contribution that offsite manufactured housing can make to their proposals for fixing our “broken housing market”.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I declare an interest as a councillor of the London Borough of Lewisham and a vice-president of the Local Government Association.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Wales Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, building more homes needs a modern homebuilding industry. New technology has improved productivity, quality and choice in a range of sectors, but housing has yet to catch up. That is why the housing White Paper talked about specific measures to stimulate the growth of modern methods of construction, including offsite. For instance, on top of providing financial support to builders, we are creating a pipeline of opportunities in the sector and setting up a specific working group on modern methods of construction.

[Lord Kennedy of Southwark]

My Lords, offsite manufactured housing could play a bigger role in helping to solve the housing crisis in the UK, as it has done elsewhere. I refer the Minister to the Building Societies Association report Laying the Foundations for Modern Methods of Construction. What are the Government prepared to do to further deal with the problem that supply is low because lenders cannot or will not routinely lend on such properties because they do not fully understand the risks, and builders will not build more of this type of housing because mortgage lending is in limited supply, as is home insurance? This type of building has the potential to help to solve the crisis, but more support is needed to help the sector.

[Lord Bourne of Aberystwyth]

My Lords, I agree with the noble Lord’s analysis that there is scope here, but already 15% of new housing—a statistic that surprised me—is produced by modern methods of construction, which is a considerable amount. As I said, we are setting up a modern methods of construction working group, which will have its first meeting in the first half of December. The noble Lord referred to difficulties with mortgages. Already, through the Buildoffsite Property Assurance Scheme, mortgage lending is being taken more account of and freed up. In the meantime, the pipeline of opportunities, to which I referred, is creating UK jobs on modular production.

[Baroness Gardner of Parkes (Con)]

My Lords, I declare an interest in that I was on the GLC and responsible for a lot of housing at that time. Is the Minister aware that, even at that stage, prefabs, as they were then called, were used in part and in whole? In areas such as Dagenham, everyone was able to have a new kitchen and bathroom added on to their house, because it was pre-constructed and could just be put in there. Is not it also important to upgrade existing buildings? That means that, instead of people needing to move on, they could have a home that allowed for an expanding family—or else a new place or prefab. It could certainly reduce production time very much, although it would need to be tested thoroughly.

[Lord Bourne of Aberystwyth]

My Lords, at the risk of appearing ungallant, I think that the type of prefab now has changed massively. Modern methods of construction have opened up that area considerably. But I take my noble friend’s point about looking at the existing housing stock and seeing whether we can add to that and improve it as well. That is something that I shall take back.

[The Earl of Listowel (CB)]

I welcome the Government’s White Paper on housing, with its increasing attention to our need to supply housing to families in this country. Would the Minister expect much of this provision, or a proportion of it, to be directed at families on low incomes who rent property? Furthermore, is it correct to say that 120,000 children in this country live in temporary accommodation, in hotels or bed and breakfasts, with a risk to disruption to their education as a consequence?

[Lord Bourne of Aberystwyth]

My Lords, I know that the noble Earl is very expert in this area, so I am sure that that statistic is correct. He is absolutely right that we need to ensure that a good proportion of the property coming on line is for the families that he spoke about—I am sure that that will be the case—and across a range of tenures.

[Lord Stunell (LD)]

My Lords, the Government’s ambitious target of 300,000 new homes a year will require a doubling of the current production. Does the Minister agree that the huge additional public spending that that will need gives the Government a very powerful hand in driving the long-term investment needed to deliver modern methods of construction, which will improve productivity, allow the industry to flourish and make at least some contribution to replacing the many EU workers being driven out by careless talk of a hard Tory Brexit?

[Lord Bourne of Aberystwyth]

First, the noble Lord is absolutely right about the need for people from overseas to help with the construction side; that is a point identified by the Government which is being taken up and acted on. In relation to investment opportunities, as I have mentioned already, there is considerable growth in the economy in this area. We have Laing O’Rourke, L&G and Swan producing modular housing in the country at the moment, in Worksop, Leeds and Basildon respectively. In Chatham, we have homes already being built with that type of investment, and over seven sites in London are taking this up. It is right to say there is great potential here, and we intend to ensure that it is used.

[Lord Forsyth of Drumlean (Con)]

My Lords, might not the Government tackle the oligopoly that exists among the big housebuilders, which results in land for which there is planning permission not being built on? Also, might we expect the Government to respond to the recommendation from the Economic Affairs Committee that we end the absurdity whereby local authorities can borrow to build swimming pools but not council houses?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is absolutely correct about the issue of land banking, although he did not call it that; it is certainly something identified in the White Paper. Borrowing is there already. I do not want to pre-empt the Budget, as I do not know what will be in it myself, but obviously it is an issue that will be looked at by the Government.

[Lord Watts (Lab)]

My Lords, what are the Government going to do about the shortage of pensioner properties? With the demographic changes taking place, surely there is a need to boost that sector?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is absolutely right. He will be aware that this was the first Government ever to identify that issue, in the Neighbourhood Planning Act 2017. We have ensured that the needs of senior citizens are identified in legislation for the first time, so planning authorities have to act on that.

[Baroness Jones of Moulsecoomb (GP)]

Could the Government look into the possibility of using offsite manufactured housing for places that at the moment are unsuitable for traditional housebuilding—for example, on brownfield sites? Some of the 1945 prefabs are still in good use, and looking good as well.

[Lord Bourne of Aberystwyth]

On the last point, the noble Baroness is absolutely right. On the earlier point, I shall take it away since it is a specific one. I shall write to her and ensure that a copy is placed in the Library.