This chapter shows that innovative London schemes have started to emerge, but that there are also challenges to the widespread adoption of MMC – such as the lack of standardisation among approaches and, more specifically to London, tightly constrained sites.
Adoption of MMC
Modern methods of construction are only slowly gaining a foothold on UK sites, despite the need to build homes more quickly. Data on the extent of MMC adoption are hard to come by, though a government report suggested that approximately seven per cent of the UK’s construction output in 2013 was off-site construction, 47 while figures from 2015 suggest that around 15,000 out of 143,000 homes built were constructed using modular techniques. 48
As part of our research, we analysed a sample of 14 MMC schemes in London by client, method of construction and contractor. Some schemes have been completed, while others are still underway. As presented in Table 1, the MMC schemes within our sample encompassed a range of different clients, including build-to-rent developers, large and small private for-sale developers, housing associations, and councils. As noted in the previous chapter, some forms of housing have a closer affinity with modular construction techniques owing to their ability to benefit from the speed advantages of MMC, including student housing (where units must be completed before the start of the academic year) and build-to-rent (where a quicker completion of units means more rent for investors). Both types have constituted big growth areas for London in recent years. In addition, local housing companies such as Brick by Brick and BeFirst – which are growing in size as housing providers in the capital 49 – intend to build modular homes as part of their portfolio.
Most schemes analysed have adopted volumetric steel frame and timber approaches, but there is still a wide range of approaches, contractors and manufacturers available. This can be explained with reference to site typology, but also the fact that different clients are experimenting with different MMC approaches inthe capital.
Site typology and MMC
The capital’s portfolio of sites is diverse. London has many large sites, which are expected to account for as much as 62 per cent of housing delivery in the next ten years; many are suitable for volumetric construction.
There are also smaller gap and infill sites, where kit-of-parts based approaches might be preferable. 50
It is clear that different approaches work for different sites, and our interviewees emphasised that site typology and access define the build methodology. Site preparation to receive an MMC structure is often more complex than for traditional approaches, with the need to clear obstructions for the assembly of modules by cranes. Irregular and constrained central London sites present a challenge for the assembly of volumetric modules; similarly, restricted site access for the flat-bed trucks required to transport these onto the site can be an issue. However, there are some examples of successful MMC development on constrained sites. For instance, Pocket Living developed a 27-storey modular tower in Mappleton Crescent, Wandsworth on a constrained site (476 sqm, triangular in shape and bordered on one side by the River Wandle). Each flat was built and fitted off-site, then craned into place at a rate of one storey a day. Panelised homes, where the factory-produced structural components of a home are assembled closer to the construction site, could also answer some of these challenges.
Comparisons with New York indicate similar challenges, but also a similar growth arc for the use of precision manufacturing. Across the USA, take-up of MMC is also slow – currently, only two per cent of new single-family homes are constructed using MMC 51 – but unlike London, New York already boasts several high-density MMC housing developments. The city is home to one of the world’s tallest modular buildings at 461 Dean Street in Brooklyn, completed in 2016 and standing at 32 storeys. Designed by Shop Architecture, 50 per cent of the building’s 363 units are reserved for low-income residents and will be allocated through a housing lottery.
However, London is catching up: 44- and 38-storey modular towers in Croydon have recently been granted planning permission and will be built by a partnership comprising Greystar and Tide Construction. The towers, at 101 George Street, are planned to be assembled from modules manufactured in Bedford, and are expected to be completed on-site over a period of 24 months. Also in Croydon, Pocket Living and Optivo housing association have teamed up with Elements Europe to build a 21-storey, 100 per cent affordable modular tower near East Croydon station. 52
Where should we manufacture homes for London?
In contrast to traditional construction, MMC mostly takes place off-site before assembly, which opens up possibilities for where new homes could be manufactured.
Should we be building new factories in London? Having factories in the capital would help to reduce travel time and emissions, contribute to local employment and training, and could make use of some unused, meanwhile sites. On the other hand, establishing MMC factories outside London – where land is more readily available and cheaper – could also help to create jobs elsewhere in the UK.
In practice, most factories are located within four hours of London. As for the modular manufacturers mentioned in Table 1, Elements Europe’s factory is located in Telford; Caledonian Modular’s is in Newark; and Vision’s is in Bedford. Berkeley Modular has set up its factory in Northfleet, Kent; NU Living’s factory is in Basildon, while Legal and General Modular Homes’ factory is located in Leeds.
However, there are on-site MMC examples in London, such as Mace’s jumping factory in Stratford mentioned previously. In Docklands, The Silvertown Partnership (consisting of Chelsfield Properties, First Base and Macquarie Capital), working with AECOM, was granted planning permission by Newham Council to build 3,000 new homes using its own on-site factory, the first of its kind in the capital.
Driving forward housing innovation
The market for MMC in London is expanding and changing. London developers and housing associations, including Berkeley Homes, Lendlease, Swan Housing and Laing O’Rourke, are experimenting with a variety of approaches. And new entrants from outside the construction industry include pension funds as well as supply chain and manufacturing companies.
The variety of models adopted and the extent of experimentation reflect where housebuilding is in the innovation cycle. In the terms popularised by Abernathy and Utterback, London’s MMC sector is in the fluid phase of the industrial innovation cycle, with many different manufacturers and contractors as well as prevailing market and technological uncertainties. 53 Once the industry moves towards a transitional phase, we can expect increased rationalisation and a reduction of costs. By comparison, the Japanese MMC industry (see Case Study 1) has reached a specific phase, with heavy standardisation in product design.
A number of factors have been driving the innovation process in London. One factor has been the cost of the traditional contractor market, especially for SME developers. For housing associations, lower manufacture costs as MMC take-up increases represent an important driver. Swan Housing has set up its own construction arm (NU Living) and a factory in Basildon, with the aim to achieve vertical integration for their business.
Councils such as Lewisham and Lambeth have been using modular schemes to meet the growing need for temporary accommodation, and vacant sites have offered the opportunity to experiment. More broadly, and as outlined in Chapter 2, 18 London boroughs are collaborating to build temporary modular housing to tackle homelessness through PLACE; and as councils are actively becoming housebuilders once again, 49 many have expressed interest in modular construction methods.
Large developers are also experimenting with modular prototypes and testing new approaches on some schemes, with the intention of being more resilient to construction workforce challenges and offering better quality products. More broadly, some developers see investment in modular as an “imperative” to maintain current levels of housing delivery.
Case Study 1: MMC in Japan
In Japan’s urban environment, the housing market is such that few people see homes as long-term investments. The fast depreciation of house value (20-30 years) makes quickly constructed bespoke MMC housing appealing. According to estimates, 15 per cent of detached homes in Japan were built using MMC in 2016, compared to just 7 per cent in the early 1970s. 55
Key manufacturers – including Sekisui House, TamaHome, Daiwa House and PanaHome – have driven the extensive cultural acceptance of MMC housing
Whilst the context of many Japanese cities may seem a far cry from the UK’s housebuilding sector, the demographic challenges that the two countries face are not so dissimilar. A lack of new entrants into the construction industry coupled with an ageing workforce has created an acute labour shortage, causing the Japanese construction industry to shrink by 26 per cent in the last two decades (from 4.6 million in 1997 to just 3.4 million in 2013). 56
While the potential for MMC in London is clear, the range of technologies remains in the fluid stage, with many different approaches being trialled. While some standardisation is likely as innovation advances, London’s diverse and sometimes complex suite of sites and development opportunities is likely to continue to demand a range of approaches. In the next chapter, we discuss the barriers preventing a more widespread and consistent adoption of MMC.