Britain has 'failed to address underlying issue of housing crisis' – but MMC might help solve it
On the day of the launch of the Building Societies Association’s new housing report, Sarah Wilde spoke to PoliticsHome about the organisation’s recommendations.
In 2016, the news has been dominated by the ever deepening housing crisis in the United Kingdom. Home ownership in England is at its lowest level for 30 years, the amount of homeless people in London has nearly tripled in the last decade and no one seems able to fix it.
But Sarah Wilde, Mortgage Policy Adviser at the Building Societies Association (BSA), explained to PoliticsHome that the organisation may have one potential solution.
“Successive governments have attempted but failed to address the underlying issues of the housing market,” she said. “Many of the interventions that we've seen have tried to address the symptoms and not really addressed the causes of the housing crisis – one of which is a chronic shortfall in housing supply.”
Today, the BSA is launching a new report in which they recommend one way to help solve the UK’s housing crisis. The report, ‘Laying the foundations for Modern Methods of Construction’ (MMC), will be launched by BSA Chairman, Dick Jenkins at the BSA Annual Lunch, where Housing Minister Gavin Barwell will be the keynote speaker.
MMC is a term used to describe different construction methods, although opinions differ on what the exact definition is, even within the construction industry. The report explains: “Some refer to MMC as being about better products and processes… Under the umbrella of MMC there has been a particular focus on offsite construction, which itself has numerous terms associated with it – modular living, volumetric, pods, offsite manufacture… its complicated, which is part of the challenge.”
The UK is way behind other countries in this area of technology. In Germany, 20% of new build homes are constructed using offsite building technology and in Japan 140,000 new homes a year use these building methods.
The BSA’s report explores how to get from where we are today to a position where the addition of modern methods of construction, particularly off site construction, can be added at volume to the more traditional building methods.
The aim is that it moves into the mainstream repertoire of the UK housing industry: housebuilders, mortgage lenders, surveyors and general insurers. At scale, it offers one way of improving supply.
The report says the UK has consistently underbuilt for many years and the current contribution falls short of the need for at least 250,000 new homes a year.
It argues that utilising offsite construction technologies offers a way of providing well designed, high quality, energy efficient and more affordable homes at a faster rate than is currently possible.
The report also warns that if the UK doesn’t take radical steps to diversify its housing supply, the imbalance between supply and demand cannot be broken.
Ms Wilde, who wrote the report, explained: “We've seen six housing ministers since 2010 and there has been a lack of long term coherent housing strategy. Supply issues have been exacerbated since local authorities stopped building.
“There really is an urgent need for another housing supply chain and that's why we think that MMC, and particular off site construction, will work.
“You get all the benefits of building in a controlled environment, you don't get impacted by the weather, it helps with things like the skills shortages, and we have an opportunity to deliver really good quality housing more quickly.”
Ms Wilde explained that the Housing Minister and his team have been briefed on this work, which will need a collaborative approach. “The Housing Minister is clearly very solution focused and we're very keen to work with him.
“Putting short term fixes on the problem has failed to address the underlying issues. Sadly, there isn't a single silver bullet, a joined up approach is needed in lots of different areas to beat the housing crisis.”
Ms Wilde argued this is a chance for the Government to lead on the policy by nurturing this small but growing industry. The report also urges the Government to lead by example on its own developments, such as Northstowe near Cambridge; a catalyst to bring the housing industry together to help innovative building technologies to reach critical mass.
“MMC homes are nothing like the emergency prefabs of the post war years although the word does keep being used. These technologies need and deserve a positive image. The aim of the report is to explore how to break down the barriers that exist Lenders for example tend to lend on this type of property by exception, we’d like it to become mainstream.
“For us, if this type of building grows, to levels like the 100,000 new homes that the Government talks about, we need to ensure that there is mortgage availability and that the homes are insurable.
“Modern methods of construction have a vital role to play in being a big part of the solution to our future housing needs, there's a lot of potential, but industries need to work together if it is to be realised.”
