Made for London: Realising the potential of modern methods of construction


The Mayor of London’s most pressing priority is to increase the availability of quality, affordable homes for Londoners. The causes of slow housing delivery are manifold, but construction methods are one of the stumbling blocks that have hindered housing delivery in London.

This research considers how innovations in housing construction and manufacturing could improve the speed, scale, and quality of housing delivery across the capital, taking into account London-specific challenges. It also outlines how the potential of Modern Methods of Construction (MMC) in the capital could be realised.

London faces huge challenges in improving the quality and quantity of homes for Londoners…

  • Housebuilding has not kept up with housing targets set in successive London Plans.
  • The current construction model is often criticised for its build quality, environmental impact, and cost.

…and these challenges are likely to be exacerbated by growing skills shortages in the future.

  • The UK construction workforce is ageing, and in London the industry is particularly reliant on European workers.
  • More workers are leaving than entering the profession, and take-up of apprenticeships is low.

MMC have the potential to enhance the speed, cost and quality of housing delivery…

  • Off-site manufacture can achieve faster delivery on-site than traditional construction—in about two-thirds of the time.
  • Improved efficiencies in the manufacturing process and reduced construction time can drive cost savings.
  • Manufacture in a factory environment (in London or beyond) can mitigate the risk of poor weather hampering construction time, as well as providing tighter controls and oversight – meaning a more precise and more consistent build quality.

…but the MMC sector is still in its infancy.

  • In 2013, seven per cent of the UK’s construction output was from off-site construction.
  • There are no specific figures for London, but MMC processes are being used by developers, housing associations, councils, and new entrants such as institutional investors.
  • The wide range of approaches adopted partly results from site conditions defining the construction method, but also reflects the fact that the sector is still in an early phase of the industrial innovation cycle, with many manufacturers and technologies vying for market position.

A number of barriers are impeding the growth of the MMC sector.

  • The novelty and variety of developments using MMC means that warranties, insurance, development finance and mortgages can be hard to secure.
  • The MMC sector will require volume and continuity of demand in order to become more established and realise efficiencies, but both the wide variety of products and the relatively small number of clients is making it hard for manufacturers and developers to scale up.
  • MMC is struggling to shake off negative public perceptions, and its use does not always sit easily with local planning policies.

If MMC is to be part of the solution to London’s housing affordability crisis, a step change is required – to develop skills, improve supply chains, promote the potential of MMC, and ensure supportive policy and financing structures.

  1. The Mayor should consider how to use devolved skills funding to help existing construction workers develop the skills needed to implement MMC, in the context of a growing commitment from City Hall to deliver MMC homes at scale across London.
  2. To build capacity and realise economies of scale, housing developers and construction companies should commit to increasing adoption of MMC throughout their supply chains.
  3. Faced with construction workforce challenges in London, developers and industry bodies should invest in upskilling workers for the transition to MMC.
  4. Councils and housing associations (with support from the Mayor and government) should pool expertise and purchasing power to form an MMC buying club. This would allow them to build at scale across multiple London boroughs, thereby helping sustain levels of factory production.
  5. Housing providers and the Mayor should set up an exhibition to bring the industry together and showcase examples of well-designed modular housing and high-quality placemaking.
  6. The Mayor should use this exhibition as a platform to discuss what can be achieved through his proposed common design framework, and encourage its widespread use as an open source tool for residential developers and manufacturers.
  7. The Mayor and partners should commission further research on customers’ perception of MMC.
  8. Mortgage providers should offer preferential loans for energy-efficient MMC homes.
  9. Councils should include a general statement supporting MMC in local plan policy, and identify small sites for SME builders.