L&G Addresses U.K. Housing Shortage, Plans to Roll Out New Prefab Housing…
… and queue the skepticism that’s plagued the US manufactured housing industry for over 40 years.
“They tried to make me buy a prefab, I said, no, no, no,”
noted a potential home purchaser in Great Britain!
That typical response to prefabricated housing was the result of a recent story published in The Economist, which reported that a manufacturer of modular housing units intends on cranking up production to build approximately 3000 to 4500 new homes per year. The expressed intent of L&G is to help mitigate the long-term affordable housing shortage currently plaguing Great Britain. There are other notable similarities between the fledgling prefabricated housing industry in the UK and the slightly more seasoned U.S. manufactured housing industry.
While prefab housing is far from “a new solution” for the world’s housing shortage, thankfully more and more builders around the globe are working to effectively scale up the manufacturing of prefab homes. Now, Legal & General (L&G) — a giant British financial services company, better known for insurance plans than building plans — aims to outfit a 550,000-square-foot, $77 million facility in Leeds, capable of producing 3,000 plus houses or apartments in a single year, according to Global Construction Review.
L&G plans on pumping $11 billion into its new home manufacturing initiative and has already committed to spending $700 million building additional home factories across the U.K. This has the potential to be a game-changer for the British housing market.
And we aren’t talking about mere structural parts. Many of the homes will leave the factory complete with carpeting, curtains, refrigerator, washing machine, and television.They are supposed to be highly energy efficient, costing a mere $118 a year to heat.
None of the reports revealed what size units would be produced to attain the production volume and the anticipated minuscule energy costs. The average house size in the U.K. is 818 square feet, while the average size in the U.S. is 2164 ft.². The minimum sized home in London is 398 sq.ft. (“tiny home?”)
Britain needs about 250,000 homes a year but has consistently built fewer than 150,000 homes. By producing complete houses which are then delivered to building site, the manufactured process does away with much of the subcontracting that can slow and complicate “on-the-peg” (site built) construction. Labor requirements are at least 25% lower than for traditional on-site construction methods, reducing costs.
Pre-manufactured housing has had a bad reputation in Britain based on the poor quality “prefab” huts that were built to deal with the post-war housing crisis. Modular housing is different insists Mr. Frankland, the head of L&G’s modular unit: “It’s not flat-pack, prefab or cheap. It does not mean inferior quality.” Yet Britons remain skeptical.
Some Americans have exhibited similar skepticism about factory produced housing. Forty years following the implementation of the HUD Code mandated by the U.S. Congress has resulted in today’s American manufactured housing being built to standards equal or superior to any site built home, yet the manufactured housing industry is still plagued by myths and misrepresentations that have origins attached to the “mobile homes” also produced following World War II.
However, that negative view has diminished as more home shoppers priced out of the traditional market have explored and surprisingly found manufactured homes not only affordable but equally acceptable as quality housing.
There is an American modular builder who has fared very well in the Great Britain modular industry. Caledonian Modular is a subsidiary of Champion Homes, one of the oldest and largest modular home builders in the U.S.
Caledonian Modular has recently announced a consolidation of operation facilities from Driffield in East Yorkshire to a new larger manufacturing plant in Newark. Situated on a 40-acre site, the Newark plant is the single largest modular manufacturing facility in the United Kingdom. And, Caledonian Modular has proposed a bold set of new strategies and growth objectives that many anticipate will double revenues over the next few years.
(Main photo courtesy of The Economist)