How MMC Could Help Solve the UK’s Ongoing Housing Crisis

Posted by Global V Tech on 17th May 2022 -

The housing crisis is a well-known burden on the UK; high rents, pay freezes and the price of houses rising quicker than wages has left the idea of homeownership a pie in the sky dream for many young people with any ambition of getting onto the property ladder – but how did we get to this point?

Unfortunately, this is nothing new to the UK; a deadly combination of government intervention and fluctuations within a volatile property market throughout the decades has gradually sky-rocketed the cost of homeownership to eye-watering heights.

The first signs of danger to house prices can be traced back over forty years ago, where the Housing Act of 1980 reduced funding to the local councils that supplied a significant number of Britain’s homes. A second Housing Act – this time in 1988 – moved further funding and power from councils to housing associations, shifting ownership vastly towards the latter.

A housing market crash in the 90s resulted in an inevitable economic recession which then caused many mortgage borrowers to hand back their keys as they fell behind on payments; repossessions and price depressions followed. 

An historic ‘buy-to-let’ initiative was introduced in 1996 in response to a sudden imbalance in the supply and demand of the property market.  This persuaded individuals that property was a good investment market as buying into rental properties was made easier than ever, expanding the rental market and driving up prices further. 

Just over a decade later, the credit crunch of 2007 made mortgages less attainable than ever as increasing numbers of unemployed Brits dipped into their savings in order to stay financially afloat. Private renting became the only choice for millions as social housing became more and more scarce and mortgages dishearteningly out of reach. 

All this has resulted in the lowest number of new homes being built since the 40s for an ever-expanding population that continues to explode demand against a dwindling supply. This boom in demand naturally hiked up prices by over 8% until the UK stamp duty holiday was announced throughout the coronavirus pandemic. The effects of isolation that stemmed from the Covid-19 induced lockdowns then resulted in a “race for space” as larger homes that provided more rooms and space became more in demand. 

The story of the UK’s housing crisis is a fabled one and spans over four decades. The relentless selling off of social housing and a cheap-credit-fuelled property market has made it historically difficult for non-owning households, and the stretching of rental prices paired with runaway house prices has made it impossible to save enough for a deposit or even qualify for a mortgage at all. 

Are we close to solving the housing crisis?

After all this time, you’d be forgiven for thinking that the UK was close to a solution for this endemic housing shortage but unfortunately there hasn’t been much progress on this front. 

An obvious response would be to build more modest, affordable homes with lower deposits that appeal to first time homeowners but the competitive nature of the property market ensures that the most profitable developments that make the most money for the most people take up the space in our towns and cities. 

In a bid to tighten the gap between supply and demand, the UK government announced in 2017 a recurring target of 300,000 homes per year until the mid 2020’s, but there is contention as to whether this approach to the housing crisis is appropriate and whether it can even be met. 

With a clear lack of obvious solutions, it’s on the UK to consider those outside of the box. One such solution that may have long-lasting effects if adopted sincerely is modern methods of construction. 

Usually shortened to MMC, it has taken off much more in areas of the world like Japan and Scandinavia compared to the UK even though it has been recognised here since the end of World War II after the large-scale destruction suffered in its wake. During this time, the UK government invested heavily in prefabricated methods of construction so that they could build homes quicker and more efficiently in the face of material shortages. 

There is no widely recognised definition of MMC as it is more of an umbrella term for a range of manufacturing techniques that largely occur offsite as an alternative to traditional house building. 

Volumetric construction – sometimes known as modular construction – refers to the offsite design and manufacture of 3D units assembled under factory conditions to increase speed and lower the costs of production. These units are typically made of timber or steel and are transported from the factory to the site with all the fixtures and fittings intact to be stacked onto pre-cast concrete foundations once on site. 

Non-load bearing mini-volumetric units (kindly shortened to ‘pods’) are similar to volumetric construction units but are smaller in size than the modular units installed into traditional structural frames. These typically include bathrooms, shower rooms, boiler rooms, and kitchens.  

Panelised systems involve manufacture of flat panels under factory conditions and, unlike volumetric methods, are assembled on site where they are incorporated into existing structures. 

These typically include open panels – such as windows and onsite insulation fittings – and closed panels such as doors and windows which are factory fitted prior to transportation. 

Although MMC adoption has been slow in the UK, recent years have seen the types of MMC houses improve significantly, with bespoke, made-to-measure houses erected on plots with their utilities already in place. This slashes the time it takes for the MMC property to reach a point where it is livable for residents, meaning more homes can be built for more people in a shorter span of time, balancing that ever-increasing imbalance between supply and demand. ” 

Modern methods of construction are also notably sustainable as building materials are precisely engineered and manufactured in a factory-controlled environment; often with materials that are, themselves, sustainable in nature. 

Given that the construction industry made up 30% of the UK’s total waste generation in 2016 alone, it’s clear that less traditional methods such as MMC are a welcome option to creating a more sustainable future for the built environment especially with the net zero target of 2050 set by the UK government. 

Many developers who are opting for modern methods of construction – especially self-builders – are doing so because MMC allows them to build a home that is far more energy efficient and, due to the savings on construction time, costs the same as a less energy efficient, traditionally built home. 

The contemporary solution may be one that has existed longer than the problem itself and so in a strange turn of events, we may have to go back to our roots in order to modernise the housing market and rid the crisis that stains it. 

Global Vtech is a leading main contractor specialising in MMC. If you’re an SME or self-builder interested in working with modern methods of construction, get in touch here for a free consultation.