Prefabricated Housing

Damian Collins Excerpts

Wednesday 4th November 2015 Westminster Hall

[Damian Collins (Folkestone and Hythe) (Con)]

I beg to move,

That this House has considered modern prefabricated housing.

It is a pleasure to serve under your chairmanship for the first time in a Westminster Hall debate, Mr Owen. I thank colleagues who are present this morning to consider this important subject. I chose to use the word “prefabricated” in the motion because I thought that would give Members the clearest steer on the subject matter, although the housing industry’s preferred terminology is “off-site manufacturing”.

For many of us, prefabrication conjures up images of the immediate post-war era, when it was one of the solutions to the country’s incredible housing need, but things have moved on a lot in the prefabricated market. Modern methods of off-site construction and manufacture and on-site assembly have transformed the use of the technology and its application in modern housing. People may have seen modern retail parks such as BOXPARK in Shoreditch, east London, which was assembled from box units and can be disassembled and moved away, and wondered whether such methods are possible in housing and an answer to the our dire housing needs. I believe that they could be. The purpose of today’s debate is to explore that and to ask the Government what opportunities exist to incentivise and encourage the development of the technology.

There is no doubt that housing need in this country is great. The record modern high for house building completions was set in 1988. It is now estimated that 230,000 new accommodation units a year are needed. In the past few years, the Government have introduced incentives and simplified the planning system and announced schemes such as Help to Buy to help more people on to the housing ladder, but despite the success of such programmes and the welcome increase in the number of housing starts and completions, the number of completions is still running at around 130,000 a year—considerably less than the target. In many ways, that is a moving target. It would be nice to have the luxury of believing that if we could just catch up with the lost years of house building during the recession, we would be in a much better place, but while that would be progress, the number of new households created each year is rising faster than we can build homes to accommodate them. That is what is creating the massive pinch in the housing market.

The problem is principally one of supply—the lack of homes to buy and of affordable homes to rent. In previous debates, we have discussed rogue landlords and problems in the private rented sector, and I was pleased to see the measures that the Government are introducing in the new Housing and Planning Bill to give councils more powers to combat rogue landlords. One of the reasons why rogue landlords exist is the lack of supply of good-quality properties in the private rented sector at affordable prices. Rogue landlords can get away with exploiting their tenants because the tenants often have few options of other places to live. More and much higher quality housing at the lower end of the market is essential.

I said that prefabrication often conjures up images of the post-war era. The building industry has evolved considerably since then, so we should not seek to copy that era’s techniques and methods, but we should certainly consider the ambition. When Winston Churchill famously gave Harold Macmillan the task of building 300,000 new homes, there were the added complexities of post-war austerity and a simple lack of timber with which to build homes. Rather than putting up their hands and saying, “We don’t have enough wood to build the homes we need,” they harnessed the ingenuity of British engineering and design to come up with different techniques and methods of building homes. Famously, they designed the timberless house, which required very little wood to support its construction. With those new ideas and methods, they were able to meet their targets. We should similarly be looking at the new ideas and methods in prefabricated housing to unleash a revolution in the design and delivery of new homes for Britain to meet the Government’s targets and the people’s need.

[Julian Sturdy (York Outer) (Con)]

My hon. Friend is making a powerful argument. He is right that prefabrication has moved on tremendously over the years. Does he agree that we should consider prefabrication not only in housing, but in schools and hospitals? Portakabin in my constituency has just signed a deal to provide a huge school project worth £44 million and is moving the technology further on every year.

[Damian Collins]

My hon. Friend is absolutely right. When thinking of portakabins, some of us may think of the rather inadequate buildings that we inhabited at school in the 1980s, but things have moved on a lot. We are looking at modern, fully furbished, fully functioning units that can be designed for almost any need and assembled quickly in any place to do any type of job. As my hon. Friend said, be it for schools, offices or accommodation, the units have many uses and can be delivered to an exceptionally high quality and specification. It is that sort of technology and approach that we want in the housing market.

I recently met the architectural practice Rogers Stirk Harbour + Partners because I wanted to find out more about the Y:Cube project that it recently delivered in Morden, south London, which I know the Housing Minister has visited. The project involves specially designed pods that are manufactured off-site. The build cost for a one-bedroom studio flat in the development could be as little as £30,000 to £35,000, and they can be rented out from £150 a week. The units can be built in the factory in a week and assembled on-site in a further week. A whole project—not just a single unit—can be delivered in about a third of the time of a traditional development. The practice believes that it can deliver a block of 50 accommodation units in less than 11 months from the moment that a planning application is presented to the council to tenants actually living in the building, which is a radical change in the time it takes to deliver a project of such complexity.

Referring back to my hon. Friend’s intervention, the modern technology used in the design of modern prefabricated units means that they are cheap to run. Energy bills can be as little as £10 a month—much cheaper than in many of the properties in the private rented sector. The construction price is also low—it could be a third less than that of even the most affordable housing units currently being built. Prefabrication totally changes the economy of the housing market for both developers and tenants. It provides an opportunity for much lower rents and prices, based not on subsidy but on the fact that the property itself is much cheaper to construct using modern methods.

The value of a property is based not only on the materials and labour used to construct it, but on the value of the land on which it sits. The Government could consider whether their land assets could be made available to support the use and development of modern off-site constructed housing. Smaller plots of land, which are often uneconomic to develop and not of interest to house builders, could be used. We have a crisis in housing supply, but not necessarily among house builders, which have many projects to work on. The economies of scale that they get from delivering a large housing estate of thousands of properties cannot be derived from a relatively small piece of land that might be owned by a local authority or a public body such as Transport for London, where perhaps only a few flats could be delivered. New methods of off-site construction make such developments much more viable. Units can be constructed off-site and assembled on-site quickly with little disturbance to local residents.

One of the biggest challenges for the construction industry is waste, but there is virtually no waste with off-site construction and on-site assembly. Furthermore, when land already owned by local authorities and public bodies or land with little commercial value because of its location and restricted size is used, methods of off-site construction come into their own. When local authorities compile a register of brownfield sites under the new Housing and Planning Bill, perhaps the Minister will ask them to include a schedule of sites suitable for off-site construction housing projects—suitable because of the land’s limited commercial potential and value, and restricted size.

Off-site construction homes also come into their own for companies that are as yet uncertain about what the best value use of their land holdings will be. Some land might be developed for commercial or residential purposes but is not being utilised at the moment, and some of us get frustrated at land being held in land banks as an asset, and not released to meet its full potential because of market circumstances. The great thing about off-site construction and on-site assembly is that homes can be removed and reused in a different location. For example, a major developer with a big project to be delivered over 10 years or more might look at short-term delivery of housing units on a site—low-cost units to rent that could be moved on later. The Government—particularly the Ministry of Defence—have land assets, but they might be reluctant to sell to a commercial developer, or not want to release too much land in one go, thereby devaluing their assets, so they might look at whether some of their sites could be used for the deployment of prefabricated housing as an interim measure.

The technology is such that the units are advanced, well designed, well insulated and durable. Rogers Stirk Harbour + Partners told me that the units in the Y:Cube project they worked on met all modern building specifications and would have a life of 60 years or more, so they could be delivered not only for low-cost rented housing, but to purchase at low cost. The units are mortgageable, because of their 60-year life.

There is massive potential for such construction and I want local authorities and the Government to look at their available assets for sites that could support the development of the technology. They should also look at the roll-out of the factory units to construct the properties, because new factory jobs can be spread around the country so that the houses are built in factories close to where they will be deployed. That might be a useful tool for economic regeneration in areas where that is needed.

The project in Merton, south London, will followed by others in Lewisham and elsewhere in the city. The technology suits the London market in particular, where the gap between people’s average earnings and the average property price is so wide that property ownership is out of reach to many people. That has also pushed rents up. Those challenges are faced throughout the south-east and, in many ways, throughout the country. Prefabrication could be a solution to rebalance the market not through subsidy, but through the development of new technology to offer new choice and lower prices.

I look forward to what the Minister will say about such opportunities. The scheme that I outlined is by no means the only one—Urban Splash has a project in New Islington, in Manchester, in which people can in effect pre-order and pre-design their home before it has been constructed. It will be manufactured off-site and then assembled on-site to their exact specification. Again that can be done for less cost than might normally be the case in the construction sector, certainly where that level of purchaser design is part of the end product. Other companies are also looking at similar schemes. We could be on the verge of an exciting new technology, which could revolutionise the design and delivery of homes in this country. I will welcome the Minister’s views.

[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 ---

[Dr Roberta Blackman-Woods (City of Durham) (Lab)]

May I say what a pleasure it is to serve under your chairmanship, Mr Owen? I congratulate the hon. Member for Folkestone and Hythe (Damian Collins) on introducing an interesting element to our housing debate.

This week we have rehearsed the point well that we are in the middle of a housing crisis. Last year’s output was only 117,000 homes, and we need about 245,000 a year, so anything that can help us to plug that huge gap in supply has to be looked at carefully, especially given the number of homes we are producing for social rent: we produced fewer than 11,000 last year—nowhere near enough. We should be delivering about 78,000 each year if we are to meet need. We should therefore look in some detail at providing what the hon. Gentleman rightly described as off-site housing, rather than prefab housing.

This is not an easy debate. The hon. Gentleman said that we do not come to this issue in a vacuum, because a number of us have experienced prefab housing built between the wars, and during and after the second world war—housing that had to be demolished in the 1970s and rebuilt. Results varied across the country. Some prefab estates lasted much longer than that, and many people who live in them really like them, but many of those houses were of insufficient quality to last and had to be demolished. We need to be careful to say that we are not talking about that sort of housing.

The Government’s off-site housing review report, commissioned in 2013, suggested that prefabricated construction methods could form part of the solution to England’s housing supply crisis. It would be helpful to hear from the Minister what the Government are doing about that report, and whether they plan to incentivise the building of that housing in any way.

The report highlighted examples such as Y:Cube, a prefabricated home scheme developed by the YMCA in London that boasts self-contained, one-bedroom flats with their own bathroom, living room and kitchen—all in a compact unit of 26 square metres. Those homes are for vulnerable young people, and it is encouraging that they meet code level 6 energy requirements. A three-week test showed that each home could be lit and heated to 20° C all day and all night for £7 a week. That is really good in terms of energy costs, and the home has a lifespan of 60 years or more.

[Damian Collins]

That scheme, which was designed for vulnerable people, is very exciting. It also makes it possible for someone who lives in a house in multiple occupation to think about having a home of their own.

[Dr Blackman-Woods]

I absolutely agree. The task is to try to envisage a wider role for such specialist housing. I think that we can see that, but there is a real issue about how we can spread it more widely. I want to raise a couple of issues that need to be taken on board if it is to have much wider application.

Although the units in that scheme in south-west London had high energy efficiency and insulation specifications, that is not always the case. Some off-site housing still has poor insulation, or uses insulation materials that will not stand the test of time. That must be taken on board.

Points were made about off-site construction using less raw material. That might be the case in construction, because when houses are built in a factory to the same design, companies will create less waste. However, in transporting these units, a lot of wood and plastic is often used; those issues need to be taken on board.

[Dr Blackman-Woods]

I am listing things that need to be taken into consideration. It is as if we had a balance sheet and needed to see the evidence. That is the point—we need evidence, and we need to make sure that these issues are addressed. The hon. Member for Folkestone and Hythe said that he wanted a revolution. I am not suggesting for a minute that there is no role for this sort of construction, but before it becomes more widespread throughout the country and across different types of housing—before the revolution—we need to be sure that we are not building up problems with transport, or with more movement on and off site. We also need to ensure that people have the right skills to construct the units properly.

[Damian Collins]

One attractive thing about the schemes is that not only can we use a factory at a distance from the site, but pop-up factories can be built on site, to create the units where they will be deployed.

--- Later in debate ---

[Damian Collins]

I thank the Minister and all hon. Members who took part in the debate. As the Minister said, we are at an important stage in the development of the advanced manufacture of homes for Britain. I was pleased to hear about his personal interest in the subject, as well as the Government’s interest, and about the role that advanced manufacture has in meeting the housing targets we have set for affordable homes to rent or buy. I hope that local authorities and public bodies that pick up on the debate will consider the use that they could make of such techniques in meeting their housing targets. I shall talk to the councils in my constituency about it, and I hope that other hon. Members will do the same. I am sure that we shall return to the subject in future housing debates.

Question put and agreed to.

Resolved,

That this House has considered modern prefabricated housing.