Prefabricated Housing

Brandon Lewis Excerpts

Wednesday 4th November 2015 Westminster Hall

[The Minister for Housing and Planning (Brandon Lewis)]

It is a pleasure to serve under your chairmanship, Mr Owen.

I thank my hon. Friend the Member for Folkestone and Hythe (Damian Collins) for securing this debate on a genuinely important subject. We have an opportunity to ensure good-quality affordable housing. Both he and my hon. Friend the Member for York Outer (Julian Sturdy) were right to highlight that this country has the opportunity to lead the way and showcase some of the excellent work done in this sector of the industry. That is why I was rather disappointed and slightly surprised by the remarks of the hon. Member for City of Durham (Dr Blackman-Woods). I cannot quite work out why the Labour party wants to spend so much time talking down the British housing industry. The hon. Lady spent more than five minutes talking about all the things she thinks are wrong in the industry.

[Dr Blackman-Woods]

I do not think I suggested for a minute that the Labour party would not support these innovations. I was arguing for good-quality design that could be rolled out at scale without repeating any of the problems of the past. I want to make it clear that the Labour party welcomes these innovations.

[Brandon Lewis]

I am pleased that we have managed to elicit that statement, given that we spent eight minutes listening to the hon. Lady list all the things in the industry she is not happy with. If Labour Members spent some time looking at what was going on in the British off-site and advanced construction industry, they would see that there is some phenomenal expertise out there. I am sure the industry will want to explain to them some of the things my hon. Friends and I have heard about through talking with the industry and visiting sites. I will talk more specifically about some of that later.

Today’s debate follows on from Second Reading of the Housing and Planning Bill and the problems we heard about then. The hon. Lady talked about the number of housing starts, but she, rather like the shadow Housing Minister, the right hon. Member for Wentworth and Dearne (John Healey), seemed to forget that there were 75,000 and 88,000 housing starts respectively in the last two years of the Labour Government. That is the inheritance we had to build on, and the industry can play an important part in that. Fortunately, despite what the hon. Lady said—her figures are somewhat out of date—we were back up to 136,000 starts in the last recorded 12 months, which is a big improvement on the disgraceful situation that Labour left, with just 75,000 starts in its last year.

My hon. Friend the Member for Folkestone and Hythe will be fully aware that, during the recent election campaign, the Conservative party made it clear that increasing home ownership and house building would be a top priority. He was right to highlight the fact that the industry has a big part to play. We have been working on this issue since 2010 and, as I said, we have built the numbers back up, although nobody disagrees that there is still a long way to go. We want to see a lot more happen, and that is where the industry has a large role to play.

The number of first-time buyers has doubled since 2009, so our success in that respect is already apparent, but our ambition, which we are determined to realise, is to go further. A fully functioning and efficient housing market is vital to meeting the aspirations of working people and to raising our country’s productivity. That is why we are committed to encouraging not only home ownership, but increased housing supply, to make sure that we have more good-quality homes that people can afford to buy and that we support all parts of the housing market and all tenures.

The way we do that is equally important. We need to deliver more new, high-quality homes, with well thought out interior design, built quickly and efficiently. As was outlined by my hon. Friend today and earlier this week by my Norfolk neighbour, my hon. Friend the Member for South Norfolk (Mr Bacon), the industry can play a part by linking with custom build to make sure we remember that a house is built for a customer. We need to design homes that are right for the people who will live in them. The Government’s proposals in the Housing and Planning Bill are designed to achieve that.

We want to see innovation in the house building and construction sector. I want us to have a diversified industry —one that does not rely on the same old companies and build in the way we have for the last 50 to 100 years. The way we build homes—traditionally using the larger builders—involves the same techniques that have been used for 50 or, arguably, 150 years. On average, it can take 20 weeks to build a house, should there be—I say this only somewhat tongue in cheek—a good flow of weather. We need to move to a system where homes are built in weeks, if not days.

Innovation and new ways of working are key to the sector’s future. Industry needs to innovate to stay competitive. That applies to the construction of homes as much as to any other field. If the larger developers do not take these types of construction forward in the years ahead, there will come a point—even the chief executives of these companies have said this to me—where they risk being left behind. Competition is good for the industry. Homes in China are being constructed using 3D printers, and they are assembled in a matter of hours. It is suggested that such homes cost about £300 a square metre and it is claimed that they will last for 150 years. That might be a bit beyond where our market is, but it is certainly the kind of innovation that is coming. Such innovations should be a key part of our housing industry. Building the housing we need quickly and cost-effectively, so that people can move in within days of assembly starting, could transform this country’s rate of housing delivery from the 20-plus weeks we see with traditional techniques.

We are talking about modern prefabricated homes, but like others I like to use the phrases “off-site construction” or “advanced construction”. In our recent discussions with industry, we have been referring to advanced housing manufacture. Homes built using such techniques—there is a variety out there—are finally starting to set the benchmark for the latest, cutting-edge designs. They are built in highly controlled factory settings and the parts are assembled precisely and on-site. Advanced housing manufacture can not only deliver high-quality homes, but help to build them quickly and efficiently. The method is now being used widely in advanced economies around the world.

The Government are keen to encourage more innovation in the way we build homes, and we are doing that through our housing programmes. The hon. Member for City of Durham asked what we are doing, so let me outline that. Through our housing zones programme, 30 brownfield sites across the country will be developed using £600 million of public funding, and we are encouraging the use of innovative construction on those sites. As my hon. Friend the Member for Folkestone and Hythe outlined, brownfield sites are often in built-up areas, where small plots and busy streets are a perfect match for advanced techniques. It is good to have debates such as this so that we can highlight some of these points, and I hope people will take note of what is said this morning.

We are also funding innovation through our multibillion pound affordable housing programme. So far, a fifth of the homes in the homes and communities programme after 2015 will be built using innovative construction techniques. Our £1 billion Build to Rent fund is also helping to build 10,000 good-quality homes for private rent. Fifteen schemes to create more than 4,000 new homes are already in contract and more deals are in the pipeline. Again, we are encouraging innovative construction through that programme, and the private rented sector fits that approach perfectly. We are also backing the market with our £150 million Custom Build Serviced Plot Loans fund, which pays for the preparation of shovel-ready sites. Large numbers of custom and self-builders prefer to use off-site construction techniques, because they appreciate the high-quality, sustainable designs and the rapid construction.

Small and medium-sized builders are vital to achieving the higher levels of innovation we all want. We are supporting them through our £525 million Builders Finance fund, which provides loans to unlock small sites, and the £100 million Housing Growth Partnership run by the Lloyds group—we are partnering Lloyds in that—which helps small builders to invest in new projects and to develop their businesses.

The wider Construction 2025 strategy sets ambitious goals for reducing costs and speeding up the delivery of construction projects, as well as encouraging innovation in the sector. We are supporting construction firm Laing O’Rourke to develop its advanced housing manufacturing factory facilities through a £22.1 million grant from the Department for Business, Innovation and Skills. There is also funding from industry more widely.

The Government are supporting the development of new apprenticeship and training programmes with a focus on off-site construction. Those are being led by industry players such as Laing O’Rourke and Skanska. It is important that we develop skills in the sector. What is beneficial about the programmes is that the skills they develop are different from the skills used in traditional techniques, and they can help with the huge skills shortage we have in the house building industry.

I welcome moves by industry to promote innovation in house building and to point the industry towards the future. I also welcome the opportunities presented by the techniques we are discussing. Last year, Buildoffsite launched its new housing hub to promote the benefits of advanced housing manufacturing. The hub aims to promote knowledge-sharing between clients and suppliers; raise awareness of new techniques; encourage new members; and develop a methodology to demonstrate the value of off-site solutions. The hub is continuing encourage wider take-up of the Buildoffsite property assurance scheme, which aims to give lenders assurance about the quality and durability of homes built using innovative construction methods. As my hon. Friend the Member for Folkestone and Hythe rightly said, the lifespan these construction methods give—in many cases, as I outlined with the China example, it goes way beyond 60 years—makes these homes very viable for mortgage lending. I talk to mortgage lenders regularly about that and other schemes to make sure they are aware of the opportunities.

It is great when innovative schemes are brought forward, and I will describe some that I have seen. The Accord group in Walsall has a scheme providing homes for rent. They are made in a factory and assembled across the road on a housing site, and the staff are people who live in the area. I saw two homes being built in a day—a very impressive rate of building. Even if it was done to show off for “The One Show”, it proved what can be done. Bearing in mind comments made about skills this morning, I found it particularly interesting that of the 17 or 18 staff on that site, all but one of them, I think, had either been unemployed or had no experience of the housing industry before starting work, yet within a couple of weeks they were playing a part in building new homes. That is a good example how this approach can change the skills supply for the industry.

Innovative construction is also being used as part of the Bicester garden town scheme. High-quality energy-efficient homes are being built for rent, shared ownership and sale. I have also visited an off-site construction company in the constituency of my hon. Friend the Member for South Norfolk, who is in the Chamber this morning; people are even being taught how to build for themselves. That is a great opportunity for young people to learn a skill and to be part of building their own home. It fits perfectly with my hon. Friend’s ambitions for the use of off-site construction in custom and self-build, which he is passionate about.

I recently helped to launch the Y:Cube scheme in Merton, which has been mentioned by my hon. Friend the Member for Folkestone and Hythe and others. Well designed, high-quality homes have been built there, using advanced housing manufacture; and they are being made available for rent to young people in the local area. Those homes offer affordable accommodation for single people who are volunteering or who are in training, education or full or part-time employment. They are well designed, drawing on the creativity of high-quality architects—some of the best we know, such as Rogers Stirk Harbour + Partners. They use new forms of construction to save time and costs.

I have visited a factory in Derbyshire where homes are being manufactured quickly and efficiently, again showing the possibility of a different skill set. The clean indoor environment extends the working life of people in the industry. Some of the units developed there are being used by Urban Splash, which is developing an exciting custom build scheme in Manchester, using off-site construction to enable buyers to customise their homes and create a bespoke solution, tailored to meet their needs. That is exactly the kind of development we want in the housing sector.

At Creekside Wharf in Greenwich, Essential Living is using an innovative modular technique to produce high-quality homes for private rent. All those schemes are just examples demonstrating the benefits that advanced housing manufacture can bring. They are a sample of what is happening: faster construction and good quality design and build, with low energy bills and the creation of jobs and homes. Council and social housing can also reap the benefits, as I have seen from the south Norfolk company that has developed homes for the local authority in Great Yarmouth.

Challenges remain, however, including shaking off stereotypical images of prefabricated housing based on some poor-quality past schemes such as the hon. Member for City of Durham described. We do the industry no justice by making such comparisons. What now exists is different; it is innovative and the quality is high. We need faster and more widespread take-up by a range of industry players who will encourage collaboration between developers and architects and work with communities, home buyers and planners, with the support of lenders. Then we can get things right. We need to build more homes in communities. Buyers, self-builders, renters and communities across the country appreciate homes of high quality and thoughtful design that are affordable and that are built quickly, in the right place. Advanced housing manufacture can achieve, or help to achieve, all that. It has enormous potential to create jobs and growth through a new factory-based industry. I encourage industry to go further with it, and use it more often. I congratulate my hon. Friend the Member for Folkestone and Hythe again on securing such an important debate.