The Building Blocks to Success: Modular Housing and Port-Centric Solutions

The UK’s construction industry finds itself having to address a number of issues at the same time. The government has set an aspirational target of building 300,000 new homes a year by 2025 (a 38% increase on current levels according to Knight Frank), there is a looming labour squeeze as the numbers of people leaving the construction industry is exceeding the numbers joining, and EU legislation states that all new buildings be built to “nearly zero-energy” standards from January 2021.

Modular building techniques have been widely touted as a solution to some or all of these problems. Whilst there has been resistance from a largely conservative sector, and previous efforts ran into the headwinds created by the crash of 2008, property experts Knight Frank’s 2018 housebuilders report states that c.90% of respondents thought that modular building techniques will make a moderate or significant contribution to the supply of residential housing in the long term (five-plus years hence), suggesting that it is a sector whose time is coming.

Sustainable Materials

The Economist ran an article in January extolling the many virtues of wood as a construction material that can help the industry towards meeting its climate change objectives. “The energy required to produce a laminated wooden beam is one-sixth of that required for a steel one of comparable strength. As trees take carbon out of the atmosphere when growing, wooden buildings contribute to negative emissions by storing the stuff. When a mature tree is cut down, a new one can be planted to replace it, capturing more carbon. After buildings are demolished, old beams and panels are easy to recycle into new structures.”

The shift in residential building towards engineered wood as a base material implies that these advantages are becoming more broadly accepted both in the construction industry and the wider public.

Improved Productivity

Some sources say that modular houses are not materially cheaper than their traditionally built peers (10%-15% cheaper is the largest saving that we have found cited), but significantly reduced delivery times (up to 60% shorter) mean that cash is received sooner, and on-site productivity rates grow significantly.

This increased efficiency is valuable in a world where construction worker numbers are falling, and the factory environment, using cutting edge technology makes for a more attractive and productive working environment.

Investments in modular factories

Legal & General’s 550,000ft2 factory in Leeds is making c.3500 dwellings a year; Swan Housing Association’s factory in Basildon is 75,000 ft2 in area and capable of producing up to 500 homes a year using cross-laminated timber. Both of these facilities suggest a metric of c150ft2 per house - if 20% of the planned 300,000 new homes needed each year by 2025 are modular-built, there will be a requirement for 9m ft2 of production facilities to support this.

As well as Legal and General making over 3500 modular homes in Leeds, Ilke Homes in North Yorkshire is aiming to increase output to about 2,000. Elsewhere, Berkeley Homes announced its intention to build 1,000 homes a year in a new factory in Ebbsfleet, Kent, and as set out above there are factories of about 75,000 ft2 in Braintree and Basildon.

Developer Urban Splash recently announced that it will add modular units over two sites in north west England. Contracts have been exchanged with Peel Land & Property for 347 units at Wirral Waters, with plans submitted for 18 at New Islington in Manchester.

A Natural Port-Centric Business

Organisations as diverse as Legal & General, Berkeley Homes and Swan Housing Association have seen enough interest to justify investment in building modular home factories. With an expected requirement for more production on large land footprints (to make up the gap between current capacity and the 9m ft2 set out earlier), combined with Peel Ports’ advantageous locations and land available for development, we think that there is an opportunity to promote the advantages of our port locations into this sector.

In announcing Weston Group’s new modular build factory (60,000 ft2 warehousing and 10,000 ft2 manufacturing space) at Braintree, the accompanying stories state that “Raw materials, goods and components can be freighted from suppliers around the world then stored and assembled at the plant before being sent on-demand to sites”.

Having an on-port operation would reduce the cost of getting raw materials (wood, steel, floor tiles etc) to the production site as they can be delivered direct to the port. On the output side, having port facilities in locations close to major population centres and areas for development then reduces the cost of transport from the factory to site. Peel Ports Group delivers on both these requirements and with land available for development offers natural locations for positioning modular homes production facilities.

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