Modular 2020

Four trends to watch out for as MMC reaches its climatic third phase. By Joseph Daniels

If 2019 was the year that the construction industry sat up and took notice of the modular movement, then 2020 is set to be the year that new attitudes trickle down to regulators, policy makers and planners too.

We have moved beyond the blue sky thinking of the late 20th Century when what could be achieved with Modern Methods of Construction (MMC) was an exercise purely for the imagination in Britain. Decades in the making, the offsite industry in the UK now has its boots on the ground, disrupting what it means to build sustainable homes.

Already, more than seven per cent of new build homes are modular (according to research from Pinsent Masons) and only a few months ago Housing Minister Esther McVey launched a new MMC ‘centre of excellence’ across the north of England calling offsite construction the “new gold standard of building”. At the same time, McVey appointed an ‘MMC Champion’ in the form of Mark Farmer, chief executive of consultancy Cast, who will be tasked with helping to make that happen. I have to declare an interest here having picked up a Building Innovation Champion award for 2019, judged by one… Mark Farmer. Mark’s a massive industry advocate and the right person for the job. The government backed all this with a concrete £30m investment in an MMC provider, coming hot on the heels of our own £19m investment from the Reuben Brothers in September.

Four trends
We haven’t been able to take a breath in between big announcements, not forgetting the Ministry of Housing, Communities and Local Government’s (MHCLG) own declaration that it won’t be possible to reach house building targets without MMC.

All this provides fertile ground for huge gains in 2020 for MMC specialists. Besides the public and private money pouring into the sector, there are four other trends you can expect to see continue throughout 2020; adoption, panelisation, economies of scale and diversification of traditional house builders.

The government has supplied an important stamp of approval. But the approval that matters most to developers sits with consumers, investors, commissioners and planning departments. Here, MMC can supply something that traditional house builders have been unable to – quality control.

Moving manufacturing onto production lines has always allowed standardisation, which has in turn raised standards. But technology now adds another dimension because it is possible QR code components to track their location and performance throughout their lives. It’s a key advantage of component-led, offsite manufacturing and all MMC providers will end up taking full advantage of this.

Quality control
This matters because last year, our newspapers and TV screens were littered with reports about poor quality new build homes. Planners are as keen as consumers to ensure that what gets built will stand the test of time and the potential for arms-length monitoring of construction is set to give those working in building control and planning departments a completely different perspective on quality assurance.

MMC will achieve that increasingly with panelised solutions. ‘Modular’ housing originally got its name from the prefabricated shells you could drag and drop into place. That’s happening less and less now because pre-formed units – even if only single rooms – have limitations; they can only be a large as the road or truck that will carry them, and they can attract higher transportation costs.

BRE standard
I share a widely-held belief that panelised rather than totally prefabricated systems are the future. The former is endlessly adaptable and gives developers the best of all worlds – customisation, a predictable manufacturing schedule and reduced on-site time – without having to make sacrifices. Expect to see non-panelised systems become a thing of the past, maybe with the exception of garden rooms, sheds and other stand-alone outbuildings.

Assembly on site also lends itself to greater use of sustainable technology. The Future Homes Standard (FHS) which is due to come into effect this year, will impose greater requirements on all developers to use green technology. That’s going to increase the volume of homes being fitted with environmental tech and that’s going to increase economies of scale for developers by rapidly raising demand and increasing competition among suppliers, helping to drive prices down. The FHS will go hand-in-hand with the soon-to-be-published BPS 7014 standard for modular construction being developed by the Building Research Establishment (BRE) – the first of its kind.

Such standards are important because they provide the financial world, particularly mortgage providers, with the kind of quality control they can lend against. BPS 7014 will be the quality mark that advocates of MMC can really get behind. This is going to help shift the sector into the fourth emerging trend of 2020 – diversification. The trail blazers have achieved proof of concept, and now you can expect traditional developers to start laying claim to market share.

The only thing that will slow this trend are the barriers to entry. Setting up MMC factories takes time and money. For MMC providers, greater investment goes into intellectual property than materials whereas traditional construction firms have little or no IP, and all their overhead is effectively made up of bricks, mortar and labour. That creates a completely different risk profile for a business and could mean MMC pioneers hang on to their first-mover advantage a little longer if the housing market continues to soften.

MMC’s transition
These are the four trends that will help the MMC revolution through its three stages of growth. The first is powered by the investors and pioneers. That has already happened. Most people have still never been in a modular home, let alone bought one, but anyone can come to Northamptonshire and walk around an Etopia Corby home (pictured), just as they can the dozens of other modular schemes going up around the country.

The second phase will see those in public life advocating for its use and committing hard currency to its progress.

The third will see the housing industry’s professionals begin modifying, en masse, how they fulfil their customers’ briefs, whether they are a council planner, a housing association, a developer or an architect.

The year 2020 will mark the quickening of MMC’s transition from the end of the second stage to the beginning of the third – the climax of a decades long journey.

Joseph Daniels is CEO at Project Etopia. Project Etopia was founded in 2015 and produces luxury modular homes and high-quality school buildings that can be built in under four weeks. Its designs incorporate pre-installed energy-efficient technology such as solar power, heat recovery, mechanical ventilation and Passive House architectural design features to ensure each building is capable of producing more energy than it needs
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