Modern methods of construction ‘the only way’ to build net zero UK homes at scale

Graham Robinson of Pinsent Masons was commenting after a senior industry figure told UK law makers that the UK government has “absolutely zero chance” of achieving its target of building 300,000 new homes in England each year unless there is industrial-scale manufacturing of the main structural components of those homes at off-site factories.

TopHat chairman Carl Leaver told the House of Lords Built Environment Committee that he has reached that view after considering the state of the UK construction labour market and the scale of the housing target, which he said had not been met before, according to a report by Building.co.uk. The Committee is currently running an inquiry that seeks to understand the barriers to the increased delivery of MMC homes and what the government can do to help.

Leaver referred to the need for “category one modular”, a term used to describe when 3D structures for buildings, like individual rooms, are manufactured in a standardised way and a scale at off-site factories and then transported to construction sites. It is just one of seven different categories of MMC, which is a general term used to describe a range of alternative off-site and on-site manufacturing techniques.

“The volumetric approach to MMC entailed in category one is just one element of the wider package of MMC measures that can support the industrialisation of construction processes needed to deliver scale in UK housebuilding – while ensuring that the new homes conform to the highest standards of energy efficiency to meet net zero obligations,” said Robinson. “Other techniques might involve, for example, the ‘kit of parts’ approach of bringing in a wide range of factory-made components, and pre-commissioned systems, such as walling systems with pre-installed and pre-commissioned services such as HVAC, for final assembly on-site, and using more automation and standardisation in the assembly process too.”

“In addition to achieving net zero – two high-rise modular residential buildings in Croydon show a 45% improvement in carbon, according to studies conducted by University of Cambridge – and a step-change in construction productivity, an industrialised approach to construction means that processes must inevitably become digitalised and this will help provide a ‘golden thread’ of information and data to meet requirements for building safety, following the Grenfell tragedy, and the Building Safety Act,” he said.

“Construction industry productivity has been stagnant for the last two decades and there is a chronic skills shortage. Meanwhile, the costs of building using traditional construction materials has increased massively since the pandemic. There are ways, however, that policymakers can support growth of the MMC industry to overcome the challenges industry is facing that align with the UK’s wider net zero agenda.”

Last year, Pinsent Masons and industry bodies, including the Royal Institution of Chartered Surveyors and Make Modular, as well as individual companies such as TopHat, jointly wrote to housing secretary Michael Gove on the topic of MMC.

The letter recognised that the UK government has already taken steps to help modernise construction methods, including putting MMC at the heart of its revised ‘Construction Playbook’, a document that sets out the government's approach to, and expectations of, future public works projects. However, the signatories called for the UK government to do more to help “unlock private investment to both scale and accelerate the adoption of modern methods of construction”.

One of the recommendations made in the letter was that stamp duty land tax (SDLT) be reduced by 5% for new homes built to an energy performance certificate (EPC) ‘A’ standard and the cost of which was calculated as of little real impact to public finances.

“The effect of that measure would be to incentivise the construction of true ‘net zero’ homes, which can only realistically be made at the scale needed via an industrialised process, and avoid expensive retrofits having to be made to the new homes that will be built in the coming years which are otherwise not set to achieve the standards needed to align with net zero, reducing costs for homeowners across the country in the process,” Robinson said.

Last month, in a speech at the Conservative party conference, prime minister Rishi Sunak confirmed that previous plans to impose new energy efficiency obligations on domestic landlords from 2025 have been scrapped. The change in policy was one of a number confirmed by Sunak which he said had been necessary to recognise the rising costs associated with implementing the policies needed to achieve net zero and the need to ensure the public’s consent to the decarbonisation agenda is not lost entirely by subjecting them to those costs too quickly. The government is expected to set out its position on the level of EPC that landlords for new and existing commercial tenancies will need to achieve, and by when, later this year.

At its party conference, the Labour party pledged to ensure 1.5 million new homes are built over the course of the next parliament if it is elected to power at the next UK general election.

According to the Department for Levelling Up, Housing & Communities, there were 210,070 new build homes in England in the period between 1 April 2021 and 31 March 2022, up from 191,820 the year before.

Beyond the government’s own Construction Playbook, Pinsent Masons helped The Construction Productivity Taskforce in the development of  its own playbook that highlights how MMC can be used to address stagnant productivity in the construction market and help industry address other challenges arising in respect of decarbonisation and building safety. The Taskforce is comprised of representatives from organisations such as BAE Systems, British Land, Bryden Wood, Alinea, Cast, Gardiner & Theobald, GPE, Landsec, Lendlease, Mace, Morrisroe, Sir Robert McAlpine, Skanska, SOM, Turner & Townsend, and Be the Business.