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Offsite is a roadmap for build-to-rent

The year so far has seen everyone from the GLA Conservative assembly members to institutional investors back modular construction as a way out of Britain’s housing crisis.

While offsite factories are not yet operating at a scale to shoulder the country’s burden themselves, major announcements like the one from Legal & General last month show a change in attitudes to this new way of building.

Modular construction is widely used on the continent, Japan and Australia, though in Britain we’ve barely scratched the surface. But with major players waking up to its immense potential, that perception is shifting.

Pole position to disrupt

The construction sector is in dire need of market disruption and modernisation, and it’s the institutionally backed build-to-rent sector that has the greatest chance of being able to kick-start that.

The Urban Land Institute (ULI) released the second edition of its Build to Rent Best Practice Guide this month, which recognised the mutually beneficial relationship between modular construction and the purpose-built rental sector.

Developers of homes for rent need to complete schemes quickly to secure rental income as early as possible, unconstrained by much slower sales velocities. The use of offsite manufacture can slash the time spent on site by up to half, depending on the model used.

“By limiting reliance on a shrinking workforce, offsite methods can shore up the industry’s capacity to bring forward homes at the scale we need”

This approach can also take advantage of design standards and commonality that can be embedded in a large build-to-rent development programme.

The repetitive nature of offsite construction means it’s often cheaper to deliver homes, but only if done at scale against a backdrop of demand certainty. This is increasingly important with the price of construction soaring and the viability of some developments now under threat.

By limiting reliance on what is effectively a shrinking workforce, greater use of offsite methods can shore up the industry’s capacity to bring forward homes at the scale we need.

Easier and greener

In an increasingly green world, pre-manufactured components also provide greater airtightness and envelope energy efficiency, reducing operating costs such as utility bills.

Building in this way also makes maintenance far easier and cheaper – items can be replaced at component level upwards and can be called off an inventory held as part of a building’s BIM model.

While modular methods can benefit all types of construction, it’s the build-to-rent sector that should grab this opportunity and embrace innovation. The hotel and student accommodation sectors have shown it can and does work.

Modular construction may not be suitable for every site – it depends on size and location – but more people are coming round to its potential.

The ULI has laid out a roadmap for build-to-rent developers to minimise their whole-life costs, procure efficiently and embrace modern methods to ensure the long-term success of their schemes and, hopefully, the sector as a whole.

Mark Farmer is the chief executive of Cast Real Estate & Construction Consultancy

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