Investor’s money won’t buy offsite success, warns expert

Throwing money at offsite and modular manufacturers won’t guarantee firms make a success of developments in the sector, an industry expert has warned.

Last week the Reuben brothers announced they were pumping £19m into modular housebuilder Project Etopia, while earlier this year Japanese firm Sekisui House took a 35% stake – worth an estimated £22m – in Urban Splash and US investment bank Goldman Sachs ploughed £75m into modular builder Top Hat.

But Tim Hall, a director at consultant Total Flow, last week told a conference in London hosted by Housing Today’s sister title Building that it was essential for companies looking to develop factory-made products to blend construction experience with an understanding of fast-developing manufacturing processes.

“Just because you’ve got a lot of money [coming in] doesn’t mean you’ll get it right,” Hall said. “It’s bloody hard work. You need to combine traditional construction knowledge with manufacturing capabilities.

Partnerships between client, manufacturer and supplier would become vital, Hall said. “You also need patience, humility – we should be getting people to understand each other’s worlds and learn from others – and an end-to-end understanding in order to invest in the journey. Start small, learn fast, then scale up,” he added.

Hall warned there could be some “spectacular failures” if firms over-reached themselves, “although obviously I hope that’s not going to happen”, he said.

He also rejected the idea of requiring minimum quotas for using modern methods of construction (MMC) in certain developments. Last week the government rejected calls from the housing select committee that ministers should consider forcing housebuilders who benefit from public funds – including the Help to Buy scheme – to use MMC techniques.

Instead the government said it would continue to encourage beneficiaries of the funds to make use of MMC “where appropriate.”

And as the industry feared the impact of a skills gap the future of manufacturing homes and even whole communities could lay in the hands of the currently very young, the Building conference heard.

Jaimie Johnston, a director at architect Bryden Wood, said youngsters like his own nine-year-old son were used to playing community-building games such as Minecraft and were naturals when it came to the technology for offsite and modular design.

“The Minecraft generation has the skills to use automated tools. It could become very engaged with the technologies that will lead towards offsite and modular housebuilding at scale in the future,” he added.

Urban Splash technical design lead Amber Beare said the offsite sector had a way to go before it reached critical mass, but expected this to be achievable in three to five years from now.