Could modular homes be a sustainable solution to the UK’s housing crisis?

In recent years, the struggling UK housing market has been widely reported on, with demand still outpacing the actual supply of affordable homes available.

While the government made promises to be building 300,000 homes a year by the mid-2020s, these are yet to materialise – but there could be a way to speed up their delivery.

Constructing homes in the UK has remained mostly the same for generations now. Despite rapid advances in technology in so many other areas of life, this industry has been relatively slow to pick up on modern alternatives to traditional ways of housebuilding.

This is where Modern Methods of Construction (MMC) come in. Amid skills shortages and rising material costs, modular construction could help to create affordable homes quickly – without sacrificing quality or sustainability.

However, with this type of construction still being quite new, there’s a lot that the industry and the general public don’t know, making people uncertain about something so unfamiliar.

If you want to learn more about modular houses and why they matter, this blog explains what you should know about modular homes and how they could solve the UK’s ongoing housing crisis.

Why is there a housing crisis?

The ‘housing crisis’ refers to the chronic shortage of affordable homes in the UK. When there are simply not enough homes available for everyone who needs them, people are kept off the property ladder and forced into private renting, with a greater risk of poverty and homelessness.

It’s not just a matter of replacing older houses that have to be demolished. There is a dire need for a further supply of new homes that are safe, sustainable, and economically accessible to live in.

While the global population growth rate continues to slow down, the UK population is still growing – but the number of homes being built isn’t keeping up with the number of people who need them. According to Sky News, around half of England’s local authorities failed to build enough houses to keep up with their population growth over the last decade.

Climate change is also a factor in the increased demand for new homes, as older buildings close to eroding coastlines are becoming costlier and less safe to inhabit.

When the housing market isn’t functioning as it should, this has a negative impact on economic growth, too. Fewer affordable homes in cities means fewer people are able to work there and form families, which will stunt long-term economic development.

What is modular housing?

Rather than being built continuously onsite, modular houses are manufactured in an off-site factory. The various parts are constructed simultaneously in ‘modules’ – following the same standards for safety and quality as traditionally built homes.

These modules can then be transported to the building site and quickly assembled into a house. The construction process is much faster, as work isn’t held up by bad weather or waiting on parts, with higher consistency meaning less waste and fewer snags.

Precisely repeatable engineering and the more intensive quality control of a factory assembly line result in a high-quality product that is just as comfortable to live in as a traditionally built equivalent. This is a more cost-effective, efficient, and sustainable way of delivering a higher volume of homes.

With modular homes already making up significant percentages of new builds in other countries, from Japan to Germany, it’s surprising that the uptake in the UK has been so slow.

Why do modular homes have a bad reputation?

One of the possible reasons for the UK’s reluctance to widely adopt modular construction is the persistent stigma that comes with ‘pre-fab’ properties. Many people still associate the idea of prefabricated homes with the bulky and unattractive short-term solutions built in the decades following World War II.

After all, prefabricated units built in a factory sound distinctly unglamorous, bringing to mind images of cheaply made, simple, and boring ‘box’ homes that all look exactly the same. Detractors will say that modular homes are mundanely uniform, and their inflexibility makes them feel impermanent.

However, just because the design is ‘ready-made’ doesn’t mean it’s low-quality or lacks personality. Modular houses are no less unique than new builds in ‘cookie-cutter’ suburban developments, and they demonstrate the latest architectural and technological methods.

For example, a modular housing development in Bristol is offering 185 homes with solar panels, air source heat pumps, and thermally efficient materials. Not only will these sustainable modular homes be between 62% and 73% cheaper to run than traditional builds, but the larger scheme also provides communal green areas for healthy outdoor activities.

This type of development is still rare, though, with potential funding issues being another reason for developers to be cautious about modular construction. Offsite factory construction is likely to require only one subcontractor, and a larger upfront investment for design and material costs.

Similarly, buyers may be cautious due to fewer opportunities to get a mortgage for a niche or unconventional build type. That said, modular housing should have the same quality assurances that come with a traditional house – including a building warranty to protect against structural defects.

The more modular construction is used, the more it will be accepted – and the more lenders will create standardised systems for this type of project.

Is modular housing environmentally friendly?

Yes – considering the climate crisis alongside the housing crisis, their sustainability is one of the biggest selling points for modular homes. According to a recent report by the manufacturers’ organisation Make UK, using modular construction:

• Is 50% faster from start to finish than bricks-and-mortar construction
• Costs 55% less to heat than the average home (32% cheaper than a traditional new build)
• Results in 90% less waste of materials than traditional builds
• Provides up to an 83% reduction in CO₂ emissions during construction
• Requires 80% less vehicle movement to and from building sites

Factory-engineered homes are built to consistent standards, with far fewer materials wasted, at a much faster speed. Less environmental pollution and local disruption during construction, and a long-lasting home that’s energy-efficient – what more could you want from an affordable home?

Another recent study by Cambridge University & Edinburgh Napier University also backed up the green credentials of modular homes. The study of two modular housing schemes in London found that factory-produced houses produce up to 45% less carbon, saving 28,000 tonnes of carbon across the 900 homes in the two schemes.

While most traditional building methods rely heavily on concrete, which comes with the high environmental cost of cement production, modern methods will primarily use timber. As long as this is sourced from sustainably managed forests, this offers a practically infinite supply.

Modular housing also offers an opportunity to repurpose existing sites rather than demolishing them, with the negative environmental impact that comes from demolition work.

Why should developers use modular construction?

Profitability is the priority for most developers, so many are unwilling to take a chance on what is still seen as a risky endeavour. However, modular homes can appeal to current and future homebuyers by giving them exactly what they want.

A survey by Leaders Romans Group found that 70% of nationwide respondents want an eco-friendly property, with 66% saying they would choose an environmentally friendly property over one without eco-friendly features. In fact, 35% would be willing to pay more for an eco-friendly home.

As the cost of living crisis worsens in the UK, properties that not only have a low carbon footprint but can also drastically reduce energy bills will be very appealing to homebuyers.

Since modular homes are faster to build, this can result in a faster return on your investment. Without procurement and weather delays on top of planning application processes, the process is smoother and more cost-efficient – and with less disruption to communities, it’s likely to be easier to secure planning permission for these developments.

Organisations like Make UK Modular are pushing for the UK government to invest in modular housing schemes, and increase their uptake by creating standardised systems for them. Regulating quality assurance specifically for modular homes would ease more lenders and buyers into choosing modular construction.

Can modular homes solve the UK housing crisis?

According to Make UK’s report, the UK government could meet its targets for building new homes if they utilised modular housing. While it can’t fulfil the demand completely, modular construction can help to plug the gap, while helping to meet targets for reducing carbon emissions, as well.

Make UK suggests that if the government dedicated up to 20%-40% of its Affordable Homes Programme to this method of construction, it could also help with levelling up economic development, with modular housing manufacturers already creating more than 3,000 jobs and investing £700 million into low-employment areas.

There’s no doubt that this is a crucial opportunity to revolutionise the construction and housing sectors, delivering greener homes on a faster track than traditional homebuilding. A move towards the speedier production of more sustainable homes can only be a good thing – but the industry is looking towards the government to make their next moves.