Darlington Building Society Chief Executive, Colin Fyfe, spoke passionately at this year's BSA annual conference on how we might grow and improve housing supply in the UK.
We have a long way to go until modern methods of construction (MMC) are widely-understood, financed, in demand and prominent on housing developments across the country. However, it is important we explore the potential now if we are to see real change in the future.
How can we increase housing supply, what will these homes look like, who will finance them, how realistic is building your own home to fulfil your own requirements? Here, we discuss with Colin what the future of housing might involve, and what it will take to get there. Innovation in mainstream housebuilding is something the UK has needed for some time.
Colin explains that this is because “we have a shortage of housing stock in the UK, and we need new thinking on how we can boost it. We need houses that appeal to people in different stages of life. For first time buyers, for downsizing in later life, for individuals separating from partners and for families. There are a range of life circumstances that need to be catered for, whether that’s finding your dream home or scraping together enough to afford your first home.”
It appears there will be no let-up in the rising demand for housing anytime soon. Self and custom build (SCB) homes, and homes built using modern methods of construction (MMC) are potential solutions to increase the supply of quality homes faster than traditional building methods on large developments can deliver. Though the term ‘modern’ might lead some to believe these building techniques are new-fangled, they have in fact been in the housebuilding repertoire of builders around the world for decades.
When it comes to designing and building our own homes, or investing in MMC properties, Colin says “the UK is at the low end of the scale”. For example in Austria around 70% of homes are built using SCB and MMC. It is time for the UK to embrace innovative housebuilding techniques to save future generations the anguish of struggling to find a suitable, or affordable, home. “New housing built in new ways with new materials are now a reality in the UK, but we need to bring together the whole housing industry to bring them into the mainstream: Valuers, manufacturers, builders, lenders and others – in order to make it happen on a larger scale.
"The UK new-build market is currently dominated by a few large builders who tend to build the same type of home.
"These builders have also admitted they alone cannot provide enough new homes to reduce the deficit in supply. There is space for MMC and SCB to take off, and once it does, it will gradually move into mainstream housebuilding.”
Colin has been busy visiting local councils to help clarify the details of the Right to Build legislation. He has found “many hadn’t picked up on their recommended actions, or were not aware they could match land with those who want to build on it. They can get an injection of cash whilst the country gets the additional homes it needs.”
Elsewhere, some lenders are apprehensive about lending on homes built using MMC, Darlington Building Society is not one of them. Colin explains: “It suits our style of lending which operates on ‘fully human’ underwriting. We have the ability to listen to specific designs and have a lot of experience with SCB properties. It works for us because of this human approach – we can understand each stage of the build.”
Designing your own home is commonly thought to relate only to the richer members of society; a reality for the few, and a dream for the rest of us. Colin does not support this school of thought: “It is true that fantastic homes are built in that way, but with custom build, which can often use MMC techniques there’s the opportunity to reduce the cost of homes. You can opt for a home that takes up less space, with different finishes and build to your budget.”
Whilst we don’t see an abundance of custom build or MMC properties on large developments right now, Colin says, “it is changing. We have a way to go before SCB and MMC is mainstream, but government policy- including Right to Build legislation - will help make these construction methods and concepts mainstream to builders of all sizes.” This should see MMC filter into buyers’ consciousness and encourage demand, providing an additional stream of UK homes.
Education for builders, surveyors, lenders, valuers and ultimately the homebuyers and renters of tomorrow is crucial.
Darlington Building Society is always looking into plans around the country for things such as new MMC factories and plays a part in developing relationships. “We are keen to see what we can do to help expand knowledge and understanding of this type of property.” Says Colin. Teesside University has recently launched a number of new courses; BSc (Hons) Advanced Home Construction and a postgraduate degree course – MSc Advanced Home Futures, in conjunction with Channel 4’s George Clarke’s company, MOBI. “We are talking to the university to work out how we can be involved to help students understand the lending perspective,” Colin explains.
There is a common misconception surrounding MMC: “People think of MMC homes as postwar emergency prefabs. We are a long way from there.” Colin clarifies. “The materials used these days are robust, they’re durable and they provide the chance to make homes more eco-friendly, easier-to-maintain and cheaper-to-run, because of the way they’re constructed. However, they do not yet have a track-record and there is no common agreement on the lifespan of such materials. Bricks have a track record: we know roughly how long we can expect them to last. Collaboration is needed to define new materials’ expected lifespan, it’s again about builders, surveyors, insurers, valuers, lenders – the whole housing industry, collaborating and defining this lifespan and implementing guarantees.”
The BOPAS 60- year durability assessment is a good starting point for this development. We are half way through the year and once again, it is looking highly unlikely that the UK will build the 300,000 homes we so desperately need to make a dent in the deficit in supply.
It is time to seriously expand where, how and who can innovate housebuilding to build quality homes faster than we are currently delivering. MMC is one possible solution. Let’s evolve our demand as a country – as builders, buyers and lenders. As Colin suggests: “Building societies need to be the voice of self and custom build (SCB) - it is ours to own, and Modern Methods of Construction (MMC) is ours to champion.”
This interview was originally part of Society Matters magazine, the BSA's quarterly industry magazine. To receive your free print or digital copy, please contact Amy Harland.