[Albert Owen in the Chair] — Prefabricated Housing

Part of the debate – in Westminster Hall at 9:53 am on 4th November 2015.

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Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing) 9:53 am, 4th November 2015

I agree with that. We need to develop skills right across the construction sector, as there is a skills shortage, but that is no reason not to consider that shortage with regard to off-site construction.

As the hon. Member for Folkestone and Hythe mentioned, we also need land for the units. That factor needs to be considered, along with infrastructure. When thinking about a unit’s cost, it is easy to get carried away and think it is much cheaper than it actually is, because land has not been factored in. The cost of land varies around the country, but it can be very expensive indeed. Size is also an issue; many costs quoted are for small units. Although such units may suit some people in some sectors of the housing market, they will not suit everyone, and larger units tend to be much more expensive.

Finally, there is the issue of mortgage availability. If prefabricated units are to be rolled out more widely, they have to be of a construction type that will attract mortgages. They must be seen to have some longevity; the fact that the units appear to be short term seems to be what prevents mortgages from being given. We need to change the thinking about the units; I am simply highlighting the issues that we need to address.

I have looked at what is available on the market. It is good to hear from Julian Sturdy that Britain is leading the way on innovation in these products, because a lot of the information in the press is about companies abroad— especially American, Australian and German companies—that have developed units for use primarily in their own countries. We seem to rely quite heavily on German companies, so it would be good if we could get an exchange of knowledge going with German developers.

I will list some interesting examples. Topsider makes two-bedroom homes ranging from 60 square metres to 250 square metres, which can be built at a cost of between $60,000 and $350,000—that range is just huge. I emphasise my earlier point that these units are not necessarily cheap. In Germany, homes made by Baufritz are very expensive, as are some of the Australian-made ones, because they are high-end and use very good materials. They are a premium housing product, rather than a cheaper, more widely deliverable one.

I have talked a lot about issues that need to be addressed in rolling out such units, so lastly I will talk about some of the possibilities. We know that these types of homes can deliver impressive reductions in energy bills. They can also lead to faster construction and so a faster return on investment. Modular construction can reduce an overall completion schedule by as much as 50%. Speeding up housing construction is important, given that we need to increase supply very quickly. Because the units are produced indoors, they are, to a degree, unaffected by weather, increasing work efficiency and avoiding damage to building materials.

The units can be low waste, as the manufacturer is constantly building to the same plans, so often knows exactly what quantity of materials to use for any given job. That avoids the need for skips going on and off construction sites—we have all seen that. Units can be environmentally friendly, and not only because of the reduction in waste; if constructed properly, they can reduce disturbance on site. The properties are flexible, and can be extended or reduced because of their modular components; they could therefore be good housing for families, who could add to their home as their family grew. The builds are also often healthier, because of the controlled environment. Having said that, maintenance and repair can sometimes be more complex and costly; that needs to be factored in.

The real issue is how we ensure that the units and properties are well designed and of good quality to begin with, and that such properties can be produced at scale, as that is where the sector has failed in the past. Does the Minister intend there to be any financial incentives for the sector, particularly for low-cost housing? If so, how will he seek to ensure that we do not repeat the errors of the past and are able to welcome this innovation in housing design and delivery?