Prefabricated Housing

Julian Sturdy 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.

--- Later in debate ---

[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.

[Julian Sturdy]

Surely when new houses are built, those materials are moved on to the site anyway, so movement is irrelevant.

[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.

--- Later in debate ---

[Dr Blackman-Woods]

That is a point well made. If apprenticeships can be attached to those factories, that will be helpful. We need people with the skills to construct the units.

[Julian Sturdy]

The hon. Lady is being very generous with her time. She is absolutely right that we need a skilled workforce to deliver the units. As I have mentioned, Portakabin employs nearly 2,000 people in my constituency. I have visited and looked at what that skilled workforce has delivered, and the results are huge. Portakabin is an exemplar for delivery in apprenticeship schemes as well. It is driving this sector forward, as are other companies across the country—there is a UK-based industry that can drive this construction forward.

[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.