Builders turn to bolt-together homes in Brexit UK
SKILLS not needed
THE PROSPECT of Brexit choking off the supply of EU workers is reshaping Britain’s home-building industry, with big companies looking to factory-manufacture houses in sections that can be slotted together onsite with minimal labour.
Many of Britain’s leading house builders said they were either planning new developments of prefabricated homes or considering doing so.
This represents something of a turnaround in a country where “prefabs” have borne a strong and lingering stigma dating back to the 1940s when Winston Churchill ordered tens of thousands of cheap, flimsy, ugly units to be built to address the housing shortage after World War II.
The change is being fuelled by fears over a labour shortage in the British construction industry, which relies heavily on European workers like carpenters, joiners and bricklayers. About 12 percent of its 2.1 million employees come from abroad, mainly the EU, according to official figures. The trend is amplified in London where a quarter of the 350 000 construction employees come from other EU countries, particularly eastern Europe.
Britain leaving the EU, with its single market and free movement of workers, threatens the flow of this crucial skilled labour at a time when the country faces another housing shortage and is looking to build 1 million homes by 2020.
This is driving a resurgence in so-called off-site construction which allows anything from bathroom pods and chimneys to entire houses to be manufactured in factories before being transported by trucks to the site and bolted together.
While this involves a bigger initial investment, it requires a fraction of the labour of traditional construction. The imperative to avoid delays from labour shortages can push up payroll costs.
“The construction industry has been doing some things the same way for hundreds of years. Historically, we had the labour but the challenge is different now,” said Berkeley chairperson Tony Pidgley.
Big Players
Berkeley is producing its first factory-built homes this year. It is starting small, with 16 prefabs in south-east London, but has another 50 in the pipeline and plans to expand the programme.
The company said was looking to build a million homes by 2020 using modular construction. It added that factory work could be carried out by fewer, and relatively unskilled, workers as most processes were automated.
Your Housing, which has a greater focus on social housing, is partnering with Chinese companies.
It said it was finalising an agreement with China National Building Material and Welink for a £2.5 billion (R40bn) joint venture to build six prefab factories in Britain, one a year until 2022, with the aim of producing thousands of homes.
Your Housing executive director Stephen Haigh said Britain’s EU withdrawal would challenge traditional building by squeezing labour, allowing factory-based construction to flourish.
Mark Farmer, the author of a government-commissioned review into the construction sector labour market last year, said the Brexit vote was forcing companies to look at off-site building techniques, to reduce dependence on traditional labour.
“I’m not talking about a few thousand units; I’m talking about investors and developers that control the development of tens of thousands of units,” said Farmer, who runs the Cast real estate and construction consultancy.
Prefab Tech
Britain lags behind other nations in the adoption of factory-based construction, which accounted for 7 percent of UK housebuilding by value in 2015 versus up to 15 percent in Germany and Japan, according to data from engineering consultancy Arcadis.
Today’s technology is light years ahead of the 1940s prefabs and prefabrication can produce homes of the same quality as traditional building techniques.
Taylor Wimpey is exploring ways to future-proof its business and considering off-site construction options, says divisional managing director John Gainham.
“Mindful of skill shortages, which is a big issue, and the implications of Brexit potentially, we’ve started to look at all the mainstream alternatives,” he said.
Its rival, Persimmon, has for many years had a factory in central England, part of a business called Space4, that makes prefab timber frames for about 40 percent of all its houses.
Space4 was looking at proposals to either increase volumes or build another factory, said Persimmon Homes Midlands chief Richard Oldroyd.
A study carried out by the Steel Construction Institute consultancy estimated
Housing, labour shortages drive resurgence in houses being built in factories before being transported to the site and assembled
that prefabrication could reduce traditional on-site labour by 75 percent. Many of these workers come from Poland.
Your Housing’s Haigh estimates its factories would require a tenth of the workforce required on a traditional project. Berkeley says prefabs will cut on-site production time from about 40 to 10 weeks.
Insurer Legal & General spent about £55m last year to set up a prefabs factory in northern England.
Justin Gates of real estate consultant Knight Frank said only the big names could afford off-site at the moment because of the initial investment required.
Companies focused on traditional construction were asking for off-site supplies, while those partly building off-site were pushing for more, said Mark Stevenson, managing director of Kingspan’s timber solutions business. “You can almost feel the fear among the contractors and house-builders where they’ve been surviving on labour from outside.” – Reuters