Ed Worlledge 56.JPG

MMC can help us to build better quality affordable homes more quickly

This summer, an investigation conducted by the Housing, Communities and Local Government Select Committee concluded that there is “compelling evidence” that England needs to build at least 90,000 more homes for social rent every year. The select committee report provided some stark statistics which demonstrate some of the problems which a lack of social housing has contributed to, including:

  • Around half a million households are homeless or living in unsatisfactory housing conditions
  • The number of people rough sleeping has risen 165% since 2010
  • One in every 200 people are without a home
  • One child in nine lives in an overcrowded home
  • Last year less than 7,000 social rent homes were built in England

Evidence gathered by the Select Committee shows that England needs the supply of new social housing to increase by more than 12 times that amount every year to 90,000 new homes for the next 15 years to meet demand.

In April this year the Affordable Housing Commission (AHC) submitted evidence to the Government’s inquiry on the ‘Long-term delivery of social and affordable housing’.

The AHC calls for the creation of a national affordable housing strategy to ensure that no child born today should face living in housing that is unaffordable for them by 2045 - the time they are old enough to form a household of their own.

What difference can MMC make?

Of all the new homes built in Britain every year, currently only around 15,000 new homes are factory made. However, Japan – which produces the highest number of homes using MMC – builds more than ten times more homes in factories than Britain does every year. As such, Japan builds between 150,000 to 180,000 factory made homes per annum.

Across Europe, Savills expects the UK to see the strongest growth in MMC production, with the proportion of new homes being delivered off-site doubling from 10% today to 20% by 2030.

It is important to note that new MMC homes being provided are not just for social rent but for all types of tenure. However, these figures help to give an indication of the potential growth for MMC in the UK and the role that it can play in helping to deliver better quality social housing more quickly.

At a recent event Public Sector Plc surveyed a number of large housing associations to understand more about their experiences of MMC and why factory-made homes work for them.

More than 50% of respondents said they take into account the impact of tenant heating/electricity bills when appraising homes built using MMC.

Energy bills for factory-built homes are far lower than homes built using traditional construction methods.

As an example, the three-bedroom zero carbon homes now being developed by Public Sector Plc cost as little as £10 a month to run.

Of the housing associations surveyed almost a third (29%) expected the future lifecycle costs for MMC homes to be lower, while two fifths (41%) thought costs would be the same and almost a third (29%) were unsure.

While initial construction costs can sometimes be higher with MMC than with traditional methods, factory-built homes help housing associations and their tenants to benefit from:

  • Lower operating costs
  • Earlier revenue from rents and sales as homes are built more quickly
  • The financial benefits of a higher-quality product and digital record, leading to reduced maintenance costs over the lifecycle of the asset
  • Significantly reduced carbon emissions
  • Furthermore, the additional costs involved in upgrading an MMC house to zero carbon are much less than for traditionally built house due to the higher specification and higher environmental standards of MMC homes

As the Affordable Housing Commission have stated an economic recovery plan which has a focus on social rented and affordable housing will create jobs and growth and can help rebalance the housing system post Covid-19.

By harnessing the power of MMC we can build more social and affordable housing more quickly, creating homes which are better and cheaper for people to live in.

While everyone accepts that local authorities are ideally placed to lead the charge and prioritise sustainability in all that they do, many feel that they are yet to see funding and policy that will make a real difference in how they can tackle climate change and green issues and promote sustainability.

CIPFA Property is hosting a series of seminars with a focus on the local authority role in delivering change in sustainable housing delivery. To register and join the CIPFA annual property conference on Thursday 26 November 2020 head to https://www.cipfa.org/training/cipfa-property-sustainability-2020.