7.There are deep seated problems with the housing market in this country and too few new homes have been built over recent decades to keep up with demand. The result has been rising house prices, lower rates of home ownership and increasing homelessness. In 2017 the Government published its Housing White Paper entitled ‘Fixing our broken housing market’ which described the problems in the homebuilding industry, and listed three main challenges:
In order to overcome these challenges the Government included priorities to build homes faster and diversify the market. Its proposals for how to achieve these priorities included taking steps to address the skills shortage by growing the construction workforce, backing small and medium sized (SME) homebuilders, bringing in new contractors through the Accelerated Construction Programme and boosting productivity and innovation by encouraging MMC.
8.In its 2017 election manifesto the Conservative Party pledged to meet the 2015 Government’s commitment to secure one million additional homes to the housing stock by 2020 and said it would add half a million more by 2022. In its Single Departmental Plan published in May 2018, the Ministry of Housing, Communities and Local Government reiterated this commitment and said it would put it on track to deliver 300,000 net additional homes annually by the mid-2020s. However, in 2018, only 165,090 new homes were completed and there continue to be regular reports in the media about the poor quality of some new developments built using traditional techniques. Mark Farmer told us there seems to be a trade-off between quantity and quality of new housing:
As quantity increases, quality diminishes. We need new techniques but we need to have approaches that are technology-enabled and that make the most of how we use digital in particular not to only design but then to manufacture, to create scalability.
9.Low levels of productivity has been an enduring feature of the homebuilding industry. Building homes faster was identified as one of the Government’s priorities in its housing White Paper. One of the potential benefits to using more MMC is the reduction in time it takes to build homes. The report by the National Audit Office entitled ‘Using modern methods of construction to build homes more quickly and efficiently’ found using new methods of construction could reduce construction time by more than half and enable up to four times as many homes to be built with the same on-site labour.
10.In the House of Lords debate on Residential Construction Methods and Housing Supply on 24 April 2019, Deputy Speaker, Lord Palmer of Childs Hill OBE, said that across the UK 15,000 homes per year are factory made, but growth in the sector has been slow; this figure represents just 5% of the homes that need to be delivered annually in the coming years if we are to average 300,000 net additions.
11.In the financial year 2017–18 the Ministry of Housing, Communities and Local Government spent £7,563 million on “Fixing the broken housing market”, including a plethora of schemes to increase home ownership and help homebuilders to access land and finance. Some of these schemes are designed to increase use of MMC; for example, the Accelerated Construction Programme was launched to help homebuilders access land for MMC developments. Other schemes such as the Home Building Fund, can be accessed by both MMC homebuilders and traditional builders. But many schemes make no special provision for MMC and it appears that only a small proportion of overall spending has gone to MMC developments. There is a lack of overall strategy to coordinate these schemes and the picture is complicated further when programmes overseen by other government departments are taken into account. The Ministry should coordinate with other governmental bodies, including skills providers and R&D programmes, such as the Transforming Construction Programme, to ensure it has a coherent cross-government strategy to increase MMC homebuilding.
12.We support the Government’s ambition to add one million additional homes to the housing stock by 2020 and increase annual output to 300,000 by the mid-2020s; however, these volumes will not be achieved unless there is much wider adoption of MMC, alongside traditional building methods. Adopting higher levels of MMC would diversify the market and help to increase the numbers of new homes delivered, but capacity in off-site construction will have to increase rapidly and new entrants come into the market, if it is going to play a significant role in meeting the Government’s homebuilding targets. To track how much the Ministry is spending on MMC specifically, it should report annually the total amount allocated to MMC developments across all its different funding streams, including generic schemes such as Help to Buy. It should implement a coordinated strategy across all relevant government departments to increase MMC homebuilding and monitor how many homes are built using MMC, in order to evaluate the impact of this strategy.
13.This country builds most of its homes using traditional methods, but it is widely acknowledged we are not building enough homes to meet demand and reports of poor-quality workmanship are commonplace. Our predecessor Committee said that MMC could make an important contribution towards addressing the industry’s problems and speed up the delivery of homes. Advocates of using MMC cite several benefits to using these methods in comparison with traditional construction techniques. The most commonly cited benefits of using MMC in written evidence to this inquiry include:
14.We received a wide range of evidence that detailed the potential benefits of using MMC to build homes. As our predecessor Committee said, MMC have the potential to make an important contribution to addressing the industry’s problems and increase the speed at which homes can be built. Therefore, the Government should take steps to exploit these benefits and help the MMC market to grow.
15.Traditional methods of construction continue to dominate the market. There are several barriers that prevent greater uptake of MMC which must be overcome if we are to see homes built using MMC in greater numbers. This report will look into these barriers and make recommendations on how the Government can help to overcome them, including on:
16.We received a wide range of evidence that explained the current barriers to uptake of MMC to build homes. The Government must adopt the recommendations in this Report to overcome these barriers if we are to achieve greater uptake of MMC and enable them to play a significant role in delivering the homes this country needs.
9 Department for Communities and Local Government, , February 2017, p13–14
10 Department for Communities and Local Government, , February 2017, p14
11 Department for Communities and Local Government, , February 2017, p18–19
12 The Conservative and Unionist Party, May 2017, p70
13 Ministry of Housing Communities and Local Government, , May 2018,
14 Ministry of Housing, Communities and Local Government, , March 2019, p7
16 National Audit Office, , November 2005, p1
17 HL Deb, 24 April 2019, [Lords Chamber]
18 Royal Institute of British Architects ()
19 eg. Enbuild Ltd () and Stonewater ()
20 Great Places Housing Group()
21 Royal Institute of British Architects ()
22 Buildoffsite ()
23 Royal Institute of British Architects ()
24 Sir Robert McAlpine ().
25 Royal Institute of British Architects ()
26 E.g. Royal Institution of Chartered Surveyors ()
27 Royal Institute of British Architects ()
28 Buildoffsite ()
29 Keepmoat Homes 
30 London Assembly Planning Committee ()
31 Great Places Housing Group()
32 London Assembly Planning Committee ()
33 Royal Institution of Chartered Surveyors ()
34 Royal Institution of Chartered Surveyors ()
Published: 3 July 2019