Social housing demand, Offsite

Offsite and Modern Methods of Construction can not only help us meet our increasing social housing demand but can boost our environmental progress too, writes John Skivington, group director at LHC Group

The government’s well-documented target to deliver 300,000 homes a year by 2025 is still very much in the spotlight.

It’s clear that the current planning system is not conducive to delivering the supply of housing that is needed, particularly genuinely affordable social housing for rent; there is too much reliance placed on the major housebuilders to supply the housing that we desperately need.

Social housing need in particular should be a priority; the National Housing Federation thinks that we need around 90,000 new social rented homes every year, but currently we are only building around 5,000.

Currently, the social housing sector does not have capacity or expertise to build its own houses to meet this demand. At first glance, the proposed removal of Section 106 planning obligations on housebuilders, as outlined in the government’s recent planning white paper, Planning for the Future, also creates a risk that the supply of so-called “affordable housing” from the private sector could also dry up.

But there is another way to look at this policy change on Section 106, whereby it could provide exactly the catalyst needed for transformational change, giving local authorities and other social landlords more control over local plans, including prioritising council-built affordable housing and more social homes to rent. This was a key feature in the housing white paper of 2017.

LHC has broadly welcomed the planning white paper, published in August, which outlines the government’s long-term proposals for a radical overhaul of England’s planning system. We want to see the public sector build its own capacity for the future.

Meeting the social housing demand

We were particularly pleased to see support laid out for SME developers and housebuilders which seek to use Modern Methods of Construction (MMC) to meet local authorities’ housing need.

MMC has been identified as one of the key factors for transforming the industry within the Reinvent phase of the Construction Leadership Council’s Roadmap to Recovery and can help deliver housing at pace. Some reports indicate that MMC homes can be constructed 30% faster than traditional methods and with up to a 25% reduction in costs. This is magnified in Build to Rent homes, where speed of construction accelerates rent revenues and lowers financial costs.

But meeting this demand isn’t the only reason why MMC homes are a viable option – we must also factor in our switch to zero-carbon buildings. The planning white paper set out proposals “that actively encourages sustainable, beautiful, safe and useful development” and that those developments create a “net gain” for the environment, not just “no net harm”.

The government wants to ensure that its new homes are environmentally friendly and contribute to climate change goals. In particular, MMC has been proven to help achieve this: a recent report published by Cast Consultancy and HTA Design indicates that offsite technology can result in a 40% reduction in emissions when compared with traditional construction, including a dramatic improvement in embodied CO2 emissions.

The report also suggests that MMC homes can exceed current ambitions for zero carbon housing as set out in the proposed Future Homes Standard, which calls for all new homes to be net-zero carbon by 2025.

Factory-made homes result in a higher build quality, generally lead to greater energy performance and result in less waste. With the planning white paper advocating more homes built to a high standard and for all new homes to be carbon neutral by 2050, constructing homes offsite ticks plenty of boxes.

We’ve seen progress in this area already. LHC introduced its latest MMC framework, NH2, which focuses on delivering MMC in the social housing sector, in April 2019. So far it has led to a pipeline of about 7,500 MMC homes across 150 projects, via 50 social landlords.

Local authorities should be buoyed by this, and by the proposals to give them more control and power over what to spend funding on. The paper also recognises that in order to implement its proposals, including more of a shift to MMC homes, overstretched local authorities need proper resourcing, technical and practical guidance, as well as help on where they can get best value for money locally. This is where LHC’s experience, local procurement expertise and MMC knowledge can certainly help.

While the coronavirus pandemic remains a focal point right now, our efforts to combat climate change – the ‘other’ global emergency – are still vital. With the UK government setting out ambitious environmental targets, including becoming net-zero by 2050, and with the 300,000 homes a year figure looming large, shifting our housebuilding offsite is an opportunity we must take in order to make significant progress.

 

 

John Skivington

Group director

LHC Group

www.lhc.gov.uk

Twitter: lhcprocurement

LinkedIn: lhc

YouTube: lhc

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