"The government needs to support the sector with legislation that can incentivise, speed up, and improve the delivery of high-quality homes and support advancements in construction practices."
In 2024, The Built Environment Committee described the government's approach to modern methods of construction (MMC) as being in “disarray”.
Following the collapse and closure of several MMC companies in 2022 and 2023, it established an inquiry into the future of MMC that found millions of pounds of public money had been invested without any “coherent strategy” or set of “measurable objectives”.
However, with the right approach, MMC can still play an important role in new house building, and the government has a big part to play in that, so what more can they do, and where are the opportunities?
There is still a reluctance to invest in the MMC sector due to reasons such as high upfront costs and perceived risks involved; this is heightened in the current economic climate of rising costs, that leave little margin for error.
These fears are underpinned by the collapse in recent years of MMC companies such as Urban Splash, Ilke Homes, and Legal and General Modular Homes.
TopHat, one of the most recent companies to wind down its modular housing operations in 2024 cited a “challenging market environment” and “continued reduction” in its future pipeline.
Having a consistent level of demand is critical to the success of MMC, and at the moment, the pipelines to deliver this consistency are not in place, and the private sector is not providing sufficient demand for this type of building.
Many housebuilders and designers see modular housing as a threat to their profit levels and would just rather stay with a sector that has served them well over the years than take the risk, both financially and reputationally.
To overcome this, the government needs to support the sector with legislation that can incentivise, speed up, and improve the delivery of high-quality homes and support advancements in construction practices.
Grants, regulations, and tax incentives could all play a key role in encouraging investment in more efficient methods of delivery, as well as zero-carbon factories, materials, and methods.
There is also a need to reshape the process for planning and approvals to prioritise long-term value (e.g., EPC A homes) and support volume in housing delivery.
Labour has committed to building 1.5 million new homes over the next parliament, and Ali Bennet director of homes at Raven Housing Trust and chair of Building Better says that MMC is “vital” to ensuring that target is met.
She is calling on the government to reinstate an MMC task force, along with mandatory targets for MMC housing. The chair of Building Better also adds that the government could help boost confidence by underwriting the risk of MMC contracts.
For brokers, and for everyone else with a stake in seeing new build succeed, the opportunities will only be met by the delivery which is the responsibility of everyone from policymakers to bricklayers.
