Prefabricated Housing

Alan Brown Excerpts

Wednesday 4th November 2015 Westminster Hall

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

It is a pleasure, Mr Owen, to serve under your chairmanship for the first time in a Westminster Hall debate.

I thank the hon. Member for Folkestone and Hythe (Damian Collins) for securing the debate. I agreed with a lot of what he said, so there is a risk that he will think that I have cribbed his speech. The debate is timely given that earlier in the week we had Second Reading of the Housing and Planning Bill in the House. We discussed the right to buy in social housing, which I spoke against for various reasons. One thing that was agreed, however, given the right to buy, was the need for replacement housing to be put back into circulation. Obviously, as has been said, prefabricated housing or off-site construction is one way to speed up that process cost-effectively.

As the hon. Gentleman said, the term “prefabricated housing” takes us back to the image of post-war housing. Although those prefabricated houses are now somewhat maligned, I agree that we have to compliment the ingenuity of the time. The houses served a real need, providing housing on site quickly when there was a shortage of raw materials. Also, the people who stayed in those prefabricated homes in general loved living in them, and some remain today, which is a testament to how well the houses were built, although in energy efficiency they no longer serve modern purposes. When I was a councillor with responsibility for housing, adapting that older prefabricated housing to energy-efficient standards was a real challenge, if not impossible. It is therefore good to revisit the prefabricated home with modern technologies for the new house build.

Over the years in Scotland, especially in the private housing sector, there has been a switch to kit houses, with much of the frame built off site for quick assembly on site, speeding up the whole building process. It makes sense that off-site construction has evolved further to provide complete wall panels, which come with insulation or even services included, and modular units.

In off-site construction, “modular units” is a more popular term than “prefabricated houses”, because it does not have quite the same connotation in the imagination. Modular units are now used for schools and offices, and we have heard about a retail development. No one looks at those units and thinks, “Oh, they were prefabricated”, or, “That’s off-site construction; it will only have a 10-year lifespan.” They look and feel permanent and have similar lifespans to traditional builds. It makes sense for modular units to be extended into the housing sector.

[Damian Collins]

The delivery of the London Olympic games was a triumph for UK design and architecture in many ways, and a prefabricated or off-site constructed unit was used for the basketball arena. It was a temporary building that was constructed for the games, but could then be disassembled and relocated to other places around the country.

[Alan Brown]

The hon. Gentleman makes a fair point about the successful delivery of the 2012 Olympics and prefabrication helping to control budgets.

It might surprise the House to know that Scotland is ahead of the curve with off-site construction and prefabrication. In 2013 there was an estimated construction value of £125 million in Scotland, compared with only £46 million in the rest of the UK. That illustrates a stark difference. Also in 2013, it was estimated that 50% of new houses in Scotland had an off-site build element, which again is a much higher rate than in the rest of the UK. We also have a much higher new build rate in social housing and private housing, and the 50% rate clearly contributes to that. Scotland’s housing growth also means a potential increase in exports, creating new jobs and keeping traditional construction jobs on site. There has been a real fillip for the construction industry.

I agree that there is less waste on site when there is off-site construction, and vehicle movements to and from the site can be reduced by up to 40%. We should consider that housing developments often take place adjacent to existing houses, so that reduction in movements is great for reducing disruption to local residents. Of course, having fewer vehicles also brings a safety benefit.

[Damian Collins]

Does the hon. Gentleman agree—I would also welcome the Minister’s thoughts on this—that we could consider off-site construction and assembly as having an advantage in the planning system, because there is less disruption to residents during the construction phase than with a normal build?

--- Later in debate ---

[Alan Brown]

I agree. When I was a councillor I was also chair of planning, and I know that the number of vehicle movements drives a lot of objections from local residents. I was in committees where we debated planning conditions to control and limit the times of movements. If we had a system that much reduced vehicle movements in the first place, that could certainly speed up planning and take some of the heat out of those considerations.

Off-site construction clearly speeds up the construction process. The trick is to have utilities on site ready for assembly. Utilities are the one risk to construction programmes, but that risk exists in traditional build as well. I am sure we have all heard about problems with getting utility companies to stick to their programme and engage with developers. As we increase the number of off-site constructions, we need to ensure that the utility companies are up to speed and do not cause delays, because delays inevitably mean that people do not get into their new-build homes quick enough.

I have outlined the advantages of this type of construction, which has seen real growth in Scotland. I want to highlight a couple of specialist companies—it is no surprise that we already have such companies operating in Scotland. Rural House, based in Skye, does more robust prefabricated designs for the more inclement highland weather. Its houses are also aesthetically pleasing; they are designed to look like traditional steadings.

In my neck of the woods, but in a neighbouring constituency, there is the Wee House Company, which was started up by an entrepreneurial 22-year-old. It can produce one or two-bedroom models in three weeks, with costs that start at £68,000. In a debate the other day there was much discussion about what was deemed affordable housing, but it is clear that units that start at £68,000 fall in that bracket.

Off-site construction has a real future in the house building industry. To steal a quote, “Let’s not call it prefabrication.”

--- Later in debate ---

[Dr Blackman-Woods]

That is helpful. It would be good to hear more about what is happening in the hon. Gentleman’s constituency, and perhaps for some of us to see that work and talk to the company, so we can better understand the industry, how it is emerging and how it could be rolled out elsewhere.

[Alan Brown]

We should be careful not to associate a potential lack of construction skills solely with off-site prefabricated house building. Whatever type of house building is undertaken, the skills need to be there, and the sector has to be able to deliver the homes we need. The hon. Lady’s point is not necessarily pertinent only to what we are considering. Construction skills are generally transferable, anyway, as tradesmen can adapt to different styles of construction.

[Dr Blackman-Woods]

I agree with that. We need to develop skills right across the construction sector, as there is a skills shortage, but that is no reason not to consider that shortage with regard to off-site construction.

As the hon. Member for Folkestone and Hythe mentioned, we also need land for the units. That factor needs to be considered, along with infrastructure. When thinking about a unit’s cost, it is easy to get carried away and think it is much cheaper than it actually is, because land has not been factored in. The cost of land varies around the country, but it can be very expensive indeed. Size is also an issue; many costs quoted are for small units. Although such units may suit some people in some sectors of the housing market, they will not suit everyone, and larger units tend to be much more expensive.

Finally, there is the issue of mortgage availability. If prefabricated units are to be rolled out more widely, they have to be of a construction type that will attract mortgages. They must be seen to have some longevity; the fact that the units appear to be short-term seems to be what prevents mortgages from being given. We need to change the thinking about the units; I am simply highlighting the issues that we need to address.

I have looked at what is available on the market. It is good to hear from the hon. Member for York Outer (Julian Sturdy) that Britain is leading the way on innovation in these products, because a lot of the information in the press is about companies abroad— especially American, Australian and German companies—that have developed units for use primarily in their own countries. We seem to rely quite heavily on German companies, so it would be good if we could get an exchange of knowledge going with German developers.

I will list some interesting examples. Topsider makes two-bedroom homes ranging from 60 square metres to 250 square metres, which can be built at a cost of between $60,000 and $350,000—that range is just huge. I emphasise my earlier point that these units are not necessarily cheap. In Germany, homes made by Baufritz are very expensive, as are some of the Australian-made ones, because they are high-end and use very good materials. They are a premium housing product, rather than a cheaper, more widely deliverable one.

I have talked a lot about issues that need to be addressed in rolling out such units, so lastly I will talk about some of the possibilities. We know that these types of homes can deliver impressive reductions in energy bills. They can also lead to faster construction and so a faster return on investment. Modular construction can reduce an overall completion schedule by as much as 50%. Speeding up housing construction is important, given that we need to increase supply very quickly. Because the units are produced indoors, they are, to a degree, unaffected by weather, increasing work efficiency and avoiding damage to building materials.

The units can be low waste, as the manufacturer is constantly building to the same plans, so often knows exactly what quantity of materials to use for any given job. That avoids the need for skips going on and off construction sites—we have all seen that. Units can be environmentally friendly, and not only because of the reduction in waste; if constructed properly, they can reduce disturbance on site. The properties are flexible, and can be extended or reduced because of their modular components; they could therefore be good housing for families, who could add to their home as their family grew. The builds are also often healthier, because of the controlled environment. Having said that, maintenance and repair can sometimes be more complex and costly; that needs to be factored in.

The real issue is how we ensure that the units and properties are well designed and of good quality to begin with, and that such properties can be produced at scale, as that is where the sector has failed in the past. Does the Minister intend there to be any financial incentives for the sector, particularly for low-cost housing? If so, how will he seek to ensure that we do not repeat the errors of the past and are able to welcome this innovation in housing design and delivery?