How can manufacturers benefit from the housebuilding revolution?

Posted on 9 Aug 2018 by Jonny Williamson

The revolution currently gripping the housebuilding industry holds great promise for manufacturers, as Nick Peters reports.

model of a house and key ring on a blueprint - image courtesy of Depositphotos.
The style of UK housing is unlikely to change because designs have to conform to standard, middle-ground architecture – image courtesy of Depositphotos.

Can there ever have been an industrial sector so ripe for disruption as construction? If, in the early 21st century you were asked to come up with a model for building houses, the current one is the last you would select.

Building on site, with mainly contract labour, subject to the vagaries of the British weather, using tools which would mostly be at home in the 1950s, and ad hoc supply systems that barely qualify for the word chain.

Little wonder that in 2015 the government asked the Construction Leadership Council to analyse the sector and come up with recommendations for its reform.

At a time when the construction workforce was dwindling, due to slowing immigration and the lack of appeal construction holds fornew entrants to the jobs market, housebuilders persisted with their outdated business model.

Manufacturers like to think they could close the skills gap if job seekers could be only persuaded of the sector’s manifold attractions. The traditional construction industry, unchanged for decades, has very much less to offer.

Since that report was published in 2016, change has been dramatic. As evidence, some point to the exotic end of the spectrum, where experimental techniques such as 3D printing concrete houses have claimed to offer a glimpse into the future, but the mass market will not look like that, for now at least.

The style of UK housing is very unlikely to change because designs will still have to conform to standard, middle-ground architecture.

The revolution will be in the speed and quality of their construction, in off-site factories, to the same high standards adhered to on the manufacturing production line.

This article first appeared in the July/August issue of The Manufacturer magazine. To subscribe, please click here.

House factories

Cement mixer for building house foundation - image courtesy of Depositphotos.
Builders typically order their materials on an ad-hoc basis – image courtesy of Depositphotos.

This is a two-speed revolution. Previously, builders ordered their materials on an ad-hoc basis; now supply chains are growing around projects, supplying pre-manufactured modules of houses to the site.

This has been happening in the public sector, in hospitals and schools, for some time; but now it is developing in housebuilding.

The off-site manufacturing membership organisation lists manufacturers who are beginning to plug into this changing landscape, supplying wall panels, steel frames, facades, whole bathrooms and bedrooms.

More and more elements of finished houses are being made off-site and assembled in situ. That is Phase One of the revolution.

The second is led by companies like Legal and General, the largest home builder in the country, which is beginning to build entire houses in their own factory, creating a vertically-integrated supply chain.

Their publicity states, “We aim to do for housing what Henry Ford did for the modern automotive industry. We will deliver a new solution to the problems we face in the UK in terms of a shortage of suitable, affordable housing. We’ll manufacture better quality, more energy and time efficient and lower cost housing to rival conventional methods.”

They have backed this up with a £55m factory in Yorkshire capable of producing 3,000 houses a year. Berkeley Homes is building a factory on a 10-acre site in Ebbsfleet, Kent, capable of turning out 1,000 houses a year, and Hampshire-based Low Carbon Construction says it can produce 10,000 homes a year.

The same number is being promised by Laing O’Rourke, who are creating a giant facility in the Midlands as part of a consortium whose R&D, training and capital investment is being grant funded by the UK government, aiming to cut the time it takes to build a house in half.

Clearly this is only a small percentage of the 250,000-300,000 new homes the country needs each year, but the speed of construction and the ‘defect-free’ quality of the buildings, combined with a marked increase in consumer choices this style of building offers will inevitably accelerate adoption, as late entrants scramble to catch up or go under.

Supply chains are increasingly growing around projects, supplying pre-manufactured modules of houses to the site - image courtesy of Depositphotos.
Supply chains are increasingly growing around projects, supplying pre-manufactured modules of houses to the site – image courtesy of Depositphotos.

It’s easy to see why consumers will be drawn to such houses. Swan Housing Association in Essex has built its own modular homes factory capable of 400 homes a year.

They say, “Buyers can design their own home, including choosing the layout, specification, external appearance and even adding additional rooms. They can use our online configurator software to design their new home, a bit like they might if ordering a new car.”

Warranties to satisfy mortgage lenders are keeping pace. Insurers BLP, working with the off-site building association Buildoffsite, Lloyds Register and the Royal Institute of Chartered Surveyors have developed the Buildoffsite Property Assurance Scheme (BOPAS) which guarantees qualifying factory-made homes for a minimum of 60 years.

Market disruptors

Large housebuilders have started investing in off-site manufacturing for compelling reasons of cost and, in some cases, reputational repair.

For smaller companies, like Manchester-based regeneration specialists Urban Splash, the modular route was always an obvious way to go and proof of concept came early, so much so that they have now opened their own factory.

“Modular’s always been an obvious draw for us, especially as it’s proven to work so well for us in urban environments,” Urban Splash director Simon Gawthorpe told us.

“Having spent more than two decades bringing innovative design to the UK housing market – including a maiden modular construction venture at Moho in Manchester in 2006 – we launched our House concept in 2016.”

1, 2, 3… floors built in a day. The House concept in practice in Manchester - image courtesy of Urban Splash.
1, 2, 3… floors built in a day. The House concept in practice in Manchester – image courtesy of Urban Splash.

This is a two or three-storey, customisable townhouse on three sites around the country; two in Manchester and one in South Shields.

Up until February this year Urban Splash houses were created in a factory in the East Midlands run by SIG, but they then took a decision to vertically integrate the factory operations into their core business, and Urban Splash now runs and operates the factory, creating all of its own modular products.

If both ends of the sector are finding modular or off-site manufacturing the right way forward, then the only thing standing in the way of the entire housebuilding sector facing complete disruption will be the speed at which factories can be built to meet the demand.

Opportunities knock

As already stated, manufacturers will find a growing market as housebuilding becomes increasingly modular. Hand in hand with that goes R&D aimed at bringing the benefits of the very latest digital manufacturing techniques to modular construction.

Dr Graham Herries, director of Digital Technologies at Laing O’Rourke’s Engineering Excellence Group, says his team are conducting research with the AMRC in Sheffield.

“We’re working with the Catapult to develop new manufacturing technologies using more data analytics, robotics, the Internet of Things and increasing automation,” he said.

“For example, we’re evaluating the use of lasers to speed up the manufacture of SmartWall partition products. As the wall comes down the production line to a precise point, a sensor triggers a laser which is projected onto the surface, identifying where a wiring or pipe assembly needs to be added so operatives can see precisely where to fix them.

“Currently, they have to determine that by measurement, which takes time; the laser will eliminate that from the process. We’re also working with AMRC to more rapidly manufacture reinforced concrete modular components for the nuclear industry.

Cross-section of residential house. Blueprint 3D image - image courtesy of Depositphotos.
Buyers are increasingly able to design their own home, including choosing the layout, specification, external appearance and even additional rooms – image courtesy of Depositphotos.

“This involves changing the production process and using robots to insert the extra-heavy-gauge steel reinforcement bar into the product during manufacture.”

A much larger funding programme will be announced this autumn when successful bids for the Industrial Strategy Challenge Fund will be announced.

One of these challenges is called Transforming Construction, and it will invest £170m in public match funding into establishing ongoing research and experimentation sites in the UK to cut the cost of housebuilding by 33%, while also slashing construction time in half.

Another member of the High Value Manufacturing Catapult, the MTC in Coventry, is involved in one of the bids, joining with the University of Cambridge and the Building Research Establishment (BRE) in the Transforming Construction Alliance.

Their goal is to build an innovation hub where the latest elements of manufacturing, construction and digital technologies come together to accelerate the pace of change in the way we build houses in the UK.

Housing may remain a contentious issue politically for some time yet, but manufacturing is rising to the technical challenges the national crisis poses, with unprecedented speed.