Covid crisis to prompt surge in MMC uptake

The coronavirus pandemic is set to mark a turning point in the adoption of modern methods of construction in the housebuilding industry, according to research which predicts a doubling in the proportion of homes built using offsite techniques in ten years.

A report by consultant Savills on the use of modern methods of construction (MMC) in the industry found MMC made up 8% of new build homes at present, a figure that will rise to 20% by 2030.

The firm said that government measures to boost key worker housing in the wake of the covid crisis could provide the steady demand needed for MMC factories to pay off, while building in a factory environment makes it easier to implement social distancing requirements at the same time as maintaining high productivity.

This is likely to be a key factor over the next year, as housebuilders have so far struggled to bring productivity up above around 80% of the normal level while working under social distancing protocols.

The report by Savills found that this driver, plus the increasing cost of labour pushing traditional construction prices up, was likely to increasingly overcome fears over the continuing high cost of MMC compared to traditional build.

Savills research analayst, Richard Valentine-Selsey, said the firm had identified over 100 schemes in the development pipeline utilising MMC, which accounted for around 17,000 new homes across a range of tenures, the majority due to be delivered in London and the south east. He said: “In the short term MMC is likely to be driven by the need to increase housing delivery and the shortage of construction workers and these two drivers indicate demand is likely to be strongest in London, the South east and the East of England.”

Despite a number of commentators pointing to the potential benefits of MMC through the covid-crisis, there is also concern that any disruption in demand for homes prompted by an economic downturn will make it hard to make offsite facilities commercially successful.

This week leading modular housebuilder Ilke (factory pictured, left) admitted it had started redundancy consultation because of delays in order coming through, following in the wake of traditional housebuilders including Crest Nicholson. Housing Today understands the Ilke consultation is likely to affect a sixth of its 600 staff. 

There is relatively little data on the uptake of offsite construction methods in the housebuilding industry. An NHBC survey in 2017 found 16% of homes were already produced using some form of MMC, however, given the various definitions of MMC used in different surveys, it is difficult to know how this compares to Savills’ data.