Homes England backs volumetric modular with £15m loan to TopHat

Homes England has agreed to lend TopHat £15m as the volumetric modular housebuilder seeks to ramp up production to 4,000 homes year.

TopHat said the move reflects the “ongoing commitment from Government to the crucial role that offsite methods of construction, including volumetric, will play in increasing the supply of quality new homes.”

The developer, which earlier this year raised £70m from investors including Aviva Capital Partners and Persimmon, is planning to open its new factory in Corby, Northamptonshire next year.

The new modular factory, described as Europe’s largest, is intended to allow TopHat to increase production to 4,000 homes a year. It currently builds around 800 a year through its existing factory in Derby.

The decision by Homes England to invest in TopHat follows numerous high-profile failures in the volumetric market, including the collapse of Ilke Homes and House by Urban Splash and the decision by L&G to close its factory in west Yorkshire after £174m of losses. 

Jordan Rosenhaus, chief executive of TopHat said: “Following some recent, well-publicised challenges, which will always be faced by pioneering, innovative sectors, I am especially pleased that our investors have all recognised the critical importance of expanding the capacity of the sector.”

>>See also: What went wrong for Ilke Homes?

>> See also: Growing pains or cause for concern? What recent financial failures mean for the modular market

Peter Denton, chief executive of Homes England, said the funding will allow TopHat to create 1,000 jobs and increase its delivery capacity fourfold.

He said: “It is vital we continue to support innovations that promote a diverse, efficient homebuilding sector.

“This is about a long-term commitment to driving forward the creation of quality, thriving places for people to live and work.”