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As Procure Plus launches its new £400m modular housing framework, Housing Digital talks with two of its facilitators, OSCO Homes and M-AR, about the benefits of both a panellised and volumetric approach and how offsite manufacturing can help the UK meet its net-zero and new-build ambitions

What are the advantages and disadvantages of a volumetric approach?

If we consider the modern methods of construction (MMC) category definition created in 2019, the volumetric approach is category 1 and carries the highest possible level of the pre-manufactured value (PMV). In simple terms, the PMV value is the level of factory finish measured in terms of a percentage finished value. Modular/volumetric homes could see a PMV of up to 95% prior to modules leaving the factory.

The UK road network will always be a limiting factor to module delivery, but we are not currently seeing any residential developments that cannot be designed with a modular solution/MMC solution in mind.

Limitations are only in the mind of the creator, and we can help educate the design teams out there to harness the full potential of an MMC solution. We are seeing hybrid solutions unlock more opportunities, and some of our developments will see a combination of MMC solutions coming together to bring forward the desired outcome.

While we have a modular factor, we are still remaining system agnostic to ensure we provide the right solution for our customers, their projects, and their budgets.

What are the advantages and disadvantages of a panellised approach?

A panelised solution provides flexibility, with different sizes of panels and configurations used to create variety in the design, meaning clients can ‘productionise’ their current house types rather than having to adopt a standard.

The structural elements are built in a factory and then assembled on site, enabling ground works and panel build to run concurrently, without the two requiring the same space and potentially disrupting each other or affecting quality.

“The planning put into the design and use of digital technology such as BIM models can greatly improve on the speed and quality of the work over a traditional approach”

Derek Greatorex

Managing director, OSCO Homes

While the assembly of a house on site will be done in a day or two, as it is panels, there will be more finishing work than a volumetric solution; but the planning put into the design and use of digital technology such as BIM models can greatly improve on the speed and quality of the work over a traditional approach.

The delivery of the panels will normally be on a standard lorry and a typical unit can be delivered in three loads, keeping disruption to the surrounding road network to a minimum while lowering the number of deliveries.

What advantages does MMC have over more traditional methods of construction?

Modular construction brings forward definitive and demonstrable programme advantages. On-site operations (such as demolition, groundworks, foundations) are taking place at the same time as modules are being assembled in the factory.

In the factory, we are seeing modules installed with fully fitted kitchens, bathrooms, and MEP services with near plug-and-play connections when the modules are bought together on site. Even floor and wall finishes can all be factory installed prior to the modules being dispatched.

Enabling operations to occur concurrently sees construction programs typically reduce by 30-40%, and in some cases up to 50%, when compared with traditional build programmes. This approach also reduces waste by up to 70-80%; and in most cases, UK mainland modular factories can see 5m-wide modules transportable on the road network, which reduces deliveries.

In a time when housing is in such demand, modular solutions can provide a no-compromise, high quality, cost-effective housing solutions with enhanced attention to detail.

The biggest gains are in repeatable high quality and programme certainty. The use of a factory, whether volumetric or panelised, ensures processes are repeated by the same team time after time, taking away the bespoke nature of most housing construction projects (whether intended or otherwise) and promotes the control required to deliver right first time.

This repeatability also brings opportunity for continuous improvement, and it is our view that this will provide the means for offsite to overtake traditional, particularly as Building Regulations increase the performance requirements of our homes.

Is there a growing interest in offsite manufacturing and less traditional ways of housebuilding?

Homes England’s Affordable Housing Programme 2021-26 sees a £7.4bn pot of funding for affordable housing supply in the next five years to use MMC such as offsite manufacturing for its housing delivery.

Homes England expects its partners to share the ambitions set out in its strategic plan to create a more resilient and diverse housing market. This means partners will also be expected to focus on promoting significant use of MMC for at least 25% of the homes needed and encouraging the use of SMEs.

We also see how MMC can be used to unlock brownfield sites, which traditional development has always shied away from. Enabling an innovative thought process from the earliest of stages has seen one of our recent projects in the north of England unlock a challenging site. Canal to one side, busy main road to the other, triangular wedge-shaped site, and previously industrial land has seen an amazing transformation through three-storeys mews style homes with roof terraces, which has transformed a derelict piece of land.

Cleverly and considered engineered foundations design was key, as was comprehensive site management.

Yes, and there are several drivers for this.

In construction, we’ve been talking about a skills gap for decades, and it’s here and only going to get worse. Offsite offers a way to address this, requiring different skills and bringing consistency and control. We need more housing, and the current large housebuilder model isn’t delivering it.

Over the last 20 years, the housebuilding market has changed, losing a lot of the SMEs and local builders and becoming dominated by a few large players that set the pace of development to maximise profit. This doesn’t accelerate supply, and so the model needs adding to. The government is incentivising social housing providers to build MMC by requiring it to secure grant.

How can offsite manufacturing help the sector and the government meet its carbon-neutral targets?

Offsite construction is seen as a key player in driving down emissions, by reducing travel to and from sites, reducing waste on and off site, and limiting landfill of waste products – but also working to limit the embodied emissions and delivering a more sustainable structure across its entire lifecycle. We estimate that the UK’s built environment accounts for around 45% of total UK carbon emissions and 32% of landfill waste.

A recent inquiry by the MHCLG laid bare the huge environmental benefits of offsite, estimating that modular construction can reduce the energy used in the construction process by 67% and waste produced onsite by between 70% and 90% in comparison with traditional construction methods. These statistics cannot be ignored.

Coupled with this, a new modular home should use around 30% to 35% less energy to heat benefitting the occupiers and the environment.

“Modular construction can reduce the energy used in the construction process by 67% and waste produced onsite by between 70% and 90%”

Wayne Yeomans

Head of Sales and Marketing, M-AR

The offsite industry is also putting increased focus on sustainability including the benefits of integrated SMART technology into new homes, such as:

  • Integrated wiring for an electric car charging point
  • Motion sensors to control the lighting, heating and burglar alarm
  • Heating systems with smart thermostats and motion sensors

Most of the offsite builders are already using materials and processes that improve the carbon usage of a home during its life. There is, as always, a balance between viability for the client and what they want to build. I can’t believe today that anyone would build to current building regulations if they could afford to do better?

A warm, comfortable, light, and healthy home, with minimal running costs, must be a benefit for anyone. But budgets are tight, and whole-life costing is something that is yet to become mainstream, particularly as the market doesn’t yet recognise the benefit – either in sale price or rental.

That said, there are already many offsite manufacturers with zero carbon in operation solutions, with some moving toward whole-life. Many of the others, I am sure, could follow suit if the demand was clear.

Can offsite manufacturing help the UK meet its housebuilding ambitions?

The offsite industry is up for the challenge. MMC and modular manufactured homes are the answer to create high-quality homes, in less time, with less people, with less waste, and a lower impact on the environment.

We need to see a change in the way we approach procurement as an industry, creating process and mechanisms that enable a call-off process and contract to be possible and a pipeline of scale that aligns with standardised designs and industry capacity. This new framework could be a step in that direction.

Yes, but….

The current developer model is very successful and, for private sale, is based on keeping supply below demand to secure a premium price each time.

This requires a supply chain that can be switched on and off, but the key for a successful offsite builder is steady demand. Of course, the PRS, social, and affordable housing can support a steady demand, but in many cases they are competing for land with the private sector.

For offsite to become the model of choice, we have to demonstrate a greater quality and therefore get the customer demanding it rather than waiting for the developers to offer it.

Anyone that has bought a new house and experienced changing completion dates and multiple defects may well be converted, but a house purchase is a once-in-a-decade, and memories fade.

What does your new framework entail?

The framework has appointed, proven, MMC providers who can offer a turnkey solution – that is, act as principal contractor and go from field to completed front door. Our approach is different, as rather than trying to aggregate everyone to a single house type, we have asked suppliers to give us their solutions to standard house requirements and, importantly, provide a fixed cost for these.

This gives a variety of standard solutions for clients to decide which best suits their site. It reduces the need to aggregate to the large volumes that many framework providers are seeking to bring together, so far, unsuccessfully. By using what the suppliers are already building for others, we can piggy back on this volume, allowing us to support the delivery of the smaller, pilot schemes that most clients want first.

We have also listened to the MMC market and asked their opinion on how to make it work. The biggest feedback was the need for early engagement. Once a scheme is out of planning, it’s probably too late. But clients are rightly nervous to select a supplier so early in a project without understanding the likely costs and whether it would be competitive. Through this framework, we can work with clients to understand likely costs and support them to make early decisions.

How has the framework been tailored to both a volumetric and panellised approach?

The framework specified that systems must be category 1 or 2, as defined in the MMC Definition Framework, but beyond that, we left it to the suppliers to decide their approach. We wanted a mix of solutions, as we believe they all have benefits, and it will be dependent on the project as to which may be the most suitable. The criteria are the same, as are those that are important to the client: cost, quality, and delivery.

Are you looking to launch more frameworks based around MMC in the future?

This framework has four years to run, so we have a little more time to consider this. Whenever we run a procurement, we give serious consideration to what the right solution should be, and then we get behind it.

We’ve set out our stall with this framework, and we will work hard to demonstrate that this approach is right for all involved. Of course, we will learn more as we go, and that learning will be captured and fed into our thinking for future frameworks.

Why is now right the time to launch this framework?

We had an offsite lot on our last framework, but we feel now is the time to focus a framework on what works for MMC, rather than just a framework that provides it.

There is currently a conundrum for both the client and the MMC provider, and we hope our framework goes a way to bridging this. To expand a little, clients understand traditional construction, how it works, where the costs are, and what they will get.

MMC providers want earlier engagement, a different cost profile, usage of different materials, and a less established market. The framework has engaged with the market to easily set out its offer and cost base and is providing a route for clients to understand, in a transparent way, what they will get before they engage.

This should support the decision for using MMC early, so clients can select and work with their MMC provider to develop the project together. This early engagement should take place in pre-planning, and the experienced team here at Procure Plus is ready to support clients through this process.

There has been a suggestion that offsite is cheaper, and we will see if in the future this is possible. But until MMC is an established delivery model, the market works inefficiently, and that is not going to deliver market beating prices.