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Modular House Building Debate – Silver Bullet or Red Herring?

May 3, 2016

Modular house building continues to be hailed as a panacea for an industry beset by recession-related woes.

Contractors have struggled to find apprentices and candidates of a suitable standard. An estimated 400,000 people left the industry during the recent downturn, leading to an acute skills shortage. With recovery come exposure of the shortage, rising wages and mounting calls for improvements in education and training.

Modular house building is considered by many to address the current crisis.


The government is under pressure to build more homes, and the Offsite Management School was launched last year to drive up skills as part of the Construction 2025 strategy. Meanwhile Buildoffsite, an industry-wide campaign body, declares: ‘Growing demand coupled with poor build quality and a reducing skills base has created a dilemma that will not be resolved without a step change in productivity and quality of build.’
Explore Offsite, which organises events exploring modular solutions, describes house building in the UK as ‘at an all-time low’. Only 141,000 homes were built last year, but 250,000 are needed. An estimated 180,000 construction workers are required in line with industry growth.

  • On the face of it, modular house building seems attractive:
  • The timescale of projects is significantly reduced, meaning faster ROI.
  • A factory environment eliminates many H&S risks.
  • Lean methodology can be applied across processes.
  • It is ideal for institutional markets and high-density projects.
  • Collaboration between key players is greater.
  • Carbon footprint is reduced and energy efficiency of designs increased.
  • Local skills shortages and weather issues can be bypassed.
  • Components are quality controlled.
  • Environmental impact during construction is greatly reduced.
  • Building Information Modelling (BIM) leads to fewer design errors.

The first ever house to be completely manufactured off-site went on show at last year’s Off-site Construction Show. Built by Central Site Accommodation in Coventry, the house was transported to the ExCeL centre in London last autumn. Managing Director Mike Walsh set out the key benefits: ‘Problems with shortages of skilled labour in different parts of the country, (and) weather delays due to the high percentage of wet trades in the traditional process are eliminated.’

The Homes and Communities Agency is a keen advocate of modular house building. Construction project costs can be reduced by up to 20%, and the cost of building the average home goes down by 10%, its site claims. The Accord Group has successfully adopted off-site manufacturing and the group used this approach to make, they believe, savings of around £400,000.
How possible is it to substantiate these claims? What are the real costs associated with modular house building? Can it ever solve acute skills shortages?


Those less in favour point to bland, generic design, capital cost premiums and damage to localism as subcontractors and suppliers are cut out of the chain.
As far back as 2004, academics were flagging up potential issues. Loughborough University surveyed key players and found that while many hailed decreased construction time (nearly 90%) around 70% felt that off-site construction methods were more expensive, and nearly half cited longer lead-in times. Crucially, the report stated: ?Workers are generally not provided with an initial broad-based training… instead, they are usually trained for just one role which consequently makes adapting and multi-skilling difficult.?

More recently, Inside Housing carried out a survey which found 17 of the largest housing associations plan to increase use of factory methods.

Over three years 56.8% of 22,544 new homes will be using off-site techniques. However, Walsall Housing Group said modern methods have not been embraced by the mainstream developer market, while there is no clear government policy or funding incentive.

The government itself points to the industry, and the need for greater collaboration along the supply chain. The UK Commission for Employment and Skills, responding to a UK Futures briefing paper which called for a redefinition of skills and more evidence-based strategies, declared:

Collaboration has been shown to be vital to building the skills needed for growth. Competitors can become collaborators where there is a commonly experienced challenge. Educators and businesses must work more closely together to ensure innovation can be capitalised upon.

Clearly, not everyone agrees that off-site construction can deliver on its promises. Economies of scale are an important factor. High construction costs become hard to justify in the private housing sector.

Key influencers point to poor policy direction and a lack of cohesive vision.

Driving up skills and equipping Britain for the future is, however, not in dispute. Modular house building may not solve all the industry’s problems, but it can perhaps be part of the solution.


  • Both the industry and the public still need convincing of the benefits of off-site and modular house building.
  • There has been an increase in uptake of modular house building, particularly in the social housing sector.
  • Equipping a multi-skilled workforce for the future will be key.
  • Collaboration between supply chain agents should override competition in modular house building.
  • What works for public sector contracts may not translate to the private housing market

Find out about Other Business-Critical House Building Issues. Download: Modern House Building: The Skills Needed for Future Growth

Modern House Building: the Skills Needed for Future Growth

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