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Why is there such a big emphasis on Modern Methods of Construction for homebuilding?

The UK construction industry is facing multiple challenges: a substantial shortfall in homes; a commitment to halve the energy consumption of new buildings by 2030; a shortage in skills; and an out of date production model that means low levels of productivity and high levels of inflation. The Farmer Review of the UK Construction Labour Model (2016), better known by its subtitle, Modernise or Die, detailed these challenges and the imperative to adopt Modern Methods of Construction (MMC).

The UK government’s MMC Definition Framework is a follow-on initiative of the Farmer Review, intended to drive change across the construction industry and homebuilding particularly given the much-publicised target of 300,000+ new homes every year. Building new homes using MMC will increase the speed and efficiency of homebuilding.


Are Registered Providers expected to use Modern Methods of Construction for all their home building projects?

Using Modern Methods of Construction (MMC) is not yet a regulatory requirement of Registered Providers, however they are now expected to “adopt a presumption of offsite solutions for homebuilding”. The government would like social housing providers to lead the way on the adoption of MMC and to use modern methods of construction to achieve homebuilding and sustainability targets. There is recognition, however, that this represents significant change, meaning Registered Providers must take a step-by-step approach. There are though, already many success stories to learn from.


What are the main benefits of Modern Methods of Construction?

Producing homes in a manufacturing environment, for example in the same manner that cars are, is an easier method of ensuring consistent quality and compliance with buildings standards. Higher standards and a better quality finish can be achieved through MMC compared to traditional build.

MMC homes can be built quicker bringing greater acceleration of construction, lower finance costs and, for build-to-rent schemes, accelerated revenue streams.

Improved sustainability
Higher build quality can lead to greater energy performance and reduced carbon emissions. Also, factory-made homes can result in less waste and better health and safety.

Reduced cost
There is a potential for reduced costs if the design and build process is aligned to MMC production and installation. Over the whole life of the asset, taking into consideration design costs and maintenance costs, MMC can show a significant cost reduction. Longer term, the cost of MMC is likely to be reduced as volumes grow whereas future ongoing increases in labour and traditional materials will lead to higher costs for traditional construction.

Boost competitiveness in the housing market
Social landlords adopting an early approach to MMC and developing accelerated learning will increase their competitiveness in the housing market in the long term.


What changes does my organisation need to make to adopt offsite solutions for social housing delivery?

The most significant change is switching to a Design for Manufacture and Assembly (DfMA) approach. This involves collaboration between designer and manufacturer at the beginning of the homebuilding process, whereas traditionally contractors have been involved in the latter stages once land and design have been approved.

Delivering the homes you need, on the land you have available, requires early involvement of manufacturers who can direct you on what’s achievable. The manufacturer’s early involvement should not inhibit the input of designers. It ideally means enhanced collaboration between these two parties.


How can we be sure the end product – people’s homes – will meet the expectations of our residents in terms of quality of living experience?

Quality control of the end product, to meet building regulations and the expectations of residents, is made easier by Modern Methods of Construction. If your residents have concerns, consider sharing the analogy of car manufacturing where consistency of product is guaranteed by a technologically advanced, pre-programmed production line.

The same applies in the manufacture of homes. You can also share with residents the range of homes constructed using manufacturing processes and demonstrate additional comfort benefits, including energy performance. There many also be opportunities to invite residents to factory visits to see their home being


How can we be sure the end product – people’s homes – will meet our minimum requirements for a 60-year design life?

There are several things you can do to make sure the end product meets this requirement. Ensure the finish build has third party build warranty, such as NHBC or equivalent. Consider using components that are standard across the construction industry. For example, timber frame and light gauge steel frame are both recognised as standard methods and included in the NHBC technical guide. Also consider using traditional external cladding and roofing systems. For non-traditional elements or new technology look at third party certification for the system such as BBA and BOPAS (which has backing from RICS, Buildoffsite, Lloyd’s Register and warranty provider BLP Insurance). These will also provide guarantee of mortgageability.


Will Modern Methods of Construction help us retain our competitiveness in a challenging housing market?

The MMC Definition Framework outlines the multiple routes to increasing the pre-manufactured value (PMV) of projects by utilising MMC. A higher PMV will make your homebuilding more competitive. PMV is determined by measuring the proportion of a project made up of on-site labour, supervision, plant and temporary works. Reducing site labour and/or increasing manufacturing can increase PMV. The greatest PMV is achieved with a bespoke manufacturing solution using a standard process, where efficiency gains can reach 40%.

You can also assess your competitiveness by evaluating assets on a whole life basis, from project inception to end of life. Compare, as well, the long-term cost trajectories of existing traditional build versus offsite techniques and look at the cost certainty of both approaches. Another consideration is the potential cash-flow trade-off between earlier payments for manufactured product and earlier receipts from quicker build times. Avoid delays by making sure your organisation is ‘business ready’ to adopt MMC.


Is there a sufficient range of off site solutions to meet the requirements of different sites?

To meet the requirements of different sites you should establish a range of procurement solutions from traditional to panelised to modular, whilst also adopting a modular-first approach. If modular can not be used for a site, it can be substituted by your other options. Make sure you formalise a ‘decision support process’ within your organisation to help teams make the best product decision for each project. Remember to involve manufacturers at the beginning of projects to get their insights on what’s achievable on a specific site.


How can we be sure a manufacturer has the capacity andfinancial strength to meet our demand in the medium to the long term?

Make sure you ask for a performance bond from your main contractor and collateral warrantees from the supply chain. Also look at the cashflow for the new programme with the manufacturer and agree a process that works for you both. You could also consider the use of vesting certificates for products that have been manufactured but not delivered. Ownership will pass to you even if the product has not been delivered to site, giving you more control over supply.

An important area for consideration is procuring a partnership between two or more manufacturers. This should be done with full and open transparency about capacity development and financial robustness. Similarly, you might also consider collaboration with other Registered Providers with similar homebuilding needs. You can aggregate your demand to be attractive to manufacturers and gain added commitments from them.

All options should be progressed with close internal consultation and may require a specialist offsite consultant, as well as an established procurement framework.


How do we manage the different components of offsite construction if we don’t have the expertise internally?

An immediate solution is to procure a ‘turnkey’ approach from companies capable of delivering the whole project. Alternatively, LHC Technical Support Managers can help coordinate the different components of your solution. We are taking this a step further with our Integrator Framework currently in research and development. Our intention is to give Registered Providers the option of a specialist project manager who can initiate and deliver projects based on their experience of offsite construction and the different components that need to come together throughout the whole lifecycle of a project.


How do we select the best MMC company if we have to follow procurement rules?

LHC’s Offsite Construction of New Homes (NH2) framework is designed to provide you with the best MMC solutions for your needs. This may involve more than one company. In which case you may need support integrating solutions. LHC’s NH2 framework gives you access to LHC Technical Support Managers who help coordinate the different components of your solution. All LHC Frameworks are OJEU compliant and have been extensively researched with clients and manufactures to understand the full range of needs, concerns and solutions. Manufacturers that have been appointed to NH2 have met stringent requirements and are best in class.


I have a development now ready for building. Is MMC my best option?

You need to consult with a manufacture before making this decision, but there is every likelihood you can adopt some level of MMC to deliver the project. Consulting with a manufacturer will enable you to design your homes for manufacture and assembly (DfMA), within the limits of what’s achievable. Depending on the volume of homes you want to manufacture, there may be options for bespoke solutions that respond to particular requirements of your site or the design and quality of homes you have in mind. Using the LHC framework NH2, for Offsite Construction of New Homes, will facilitate the consultation process and ensure DfMA takes place.


Can I use my current contractor to deliver MMC?

Yes, they can access a product solution through the LHC Offsite Construction of New Homes (NH2) framework. The NH2 Framework also offers turnkey contractors who have met stringent requirements and are best in class. They will guarantee you follow the correct process of design for manufacture and assembly and avoid the pitfalls of by-passing this process.