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Ulises Moreno-Tabarez

January 23rd, 2019

Modern methods of construction in London: interview with Victoria Pinoncely


Estimated reading time: 10 minutes

Ulises Moreno-Tabarez

January 23rd, 2019

Modern methods of construction in London: interview with Victoria Pinoncely


Estimated reading time: 10 minutes

One of the most serious problems facing London is the construction of new housing. There is uncertainty about whether the Mayor’s goal of almost doubling output can be achieved. The need to increase the scale and speed of delivery dramatically is undeniable. But there are also many challenges (slow delivery, poor quality, financial and environmental costs) and workforce challenges (skilled workforce shortage, retirement and departure, low take-up of construction apprenticeships). Centre for London’s recent report, Made for London: realising the potential of modern methods of construction, focuses on the potential for modern methods of construction (MMC) to enhance the speed, cost, and quality of housing delivery. To be part of the solution to London’s housing crisis, MMC needs serious attention. The report makes several recommendations including:

  • housing developers and construction companies should aim to bring MMC into their supply chain to support produce viable economies of scale;
  • councils and housing associations should organise to form an MMC buying club thus ensuring sustainable of factory production and building at scale across London;
  • the Mayor and partners should commission further research on customers’ perception of MMC.
Victoria Pinoncely

This is an edited version of an interview LSE London’s Ulises Moreno-Tabarez (UMT) conducted with Victoria Pinoncely (VP), one of the authors of the report (co-author Erica Belcher), about the report and MMC in general.

UMT: One of the recommendations mentioned the creation of a buyer’s club which is by definition an exclusive thing, how would they ensure new SME players in the MMC field also get access to this club so as to have a fair chance at business sustainability?

VP: Getting access to MMC is difficult; while councils and smaller developers are particularly attracted by the prospect of the lower manufacturing costs on suitable sites and speedier delivery, the set-up cost of MMC currently remains high, and can act as a deterrent.

The recommendation to create an MMC club stems from a ‘strength in numbers’ principle rather than the idea of exclusivity. The report calls for a club for councils – which have naturally got similar aims and challenges which is similar to the existing PLACE initiative for temporary housing, but at greater scale and for permanent housing. This could, of course, work for other actors such as housing associations and SME house builders – for which the government has already established a Housebuilding Fund to help them to secure loan finance.

A club is also to pool demand. The MMC sector will require volume and continuity of demand in order to become more established and realise efficiencies, but the relatively small number of clients is making it hard for manufacturers to scale up. Given that the time savings and cost benefits of MMC are realised through purchase at scale and standardisation of layouts and specification, joint collaboration between councils and other house builders through a MMC buying club would allow resources to be combined to build at scale across London.

UMT: The report notes that MMC is still in its infancy, but it also acknowledges lingering negative public perceptions—what exactly then is new about the MMC sector?

VP: Modern methods of construction are in their infancy but are still unhelpfully associated with the poorly perceived ‘prefabs’ (a term the industry thoroughly dislikes!) schemes as offsite, non-traditional approaches – i.e. not ‘bricks and mortar’ – although they are vastly different in character and levels of technological advancement.

While post-war house builders used extensive prefabrication to quickly replenish the stock of public housing, resulting in some poor-quality schemes, mostly made of precast concrete panels (for example, Ronan Point), MMC involves the manufacture of housing from modular units or significantly scaled components, using innovative precision digital design and encompassing a wider range of materials, including cross-laminated timber and light steel.

Despite lingering negative perceptions, manufacture in a factory environment can mitigate the risk of poor weather hampering construction time, as well as providing tighter controls and oversight – meaning a more precise and more consistent build quality. For example, in Germany, MMC is now more associated with high quality of construction and bespoke design than traditional construction, with the MMC industry gaining this position through the development of quality standards and certification schemes, alongside consistently promoting of the merits of MMC.

By contrast, although there has been a range of MMC schemes in London, their modular nature is not put forward as a strong selling point. That is why the report calls for commissioning further research on customer’s perceptions of MMC – we are not actually sure whether people dislike modern modular homes.

Modular building in Holloway Road, by Victoria Pinoncely

UMT: Why is it still in its infancy? And what do people dislike/fear?

VP: The reasons for the low take up of modular construction are manifold (and outlined in the report in more detail). Maybe more than public attitudes, buy-in from key industry stakeholders who have got used to the old methods is a challenge, although they also perceive the current modular market as immature, with supply chain inefficiencies inhibiting the development of a scalable business model and inflating the costs of MMC (besides the high early capital expenditure required mentioned above). In turn, precision manufacture factories have to work at a high capacity to break even, a challenging feat for many given the volatility of the housing market and lack of consistent pipeline of demand from the industry, resulting in a vicious circle.

These factors, unsurprisingly, do little to reassure funders or insurers, owing to modular schemes that are far more diverse in approach than those undertaken by traditional methods, lack of track record and uncertainty of future supply. Availability of finance and mortgages for MMC developments is a considerable barrier, closely linked to the ability to provide warranties and insurance for these novel construction techniques; research by the London Assembly suggests 80 per cent of MMC companies in London find it very difficult to secure funding from high street banks due to a lack of confidence on their part. However, there is evidence to suggest that mortgage providers are steadily growing more supportive of MMC. Finally, the lack of standardisation of MMC design and method has acted as a barrier, however the GLA has announced the development of a future standardisation tool last year.

UMT: What does your report suggest about the potential impact MMC can have on meeting the Mayor’s ambitious housing delivery goals (64,000 each year in the draft London Plan of which over half should be affordable)?

VP: As the current take up of modern methods of construction in the capital is very low, and there are many barriers to be addressed, it can be hard to give a forecast MMC figure (and of course, they shouldn’t wholly replace traditional construction methods that are still very much required). Affordability is a grey area – as outlined above, MMC is niche (and therefore costly) and land and planning costs represent a large part of development cost as well as construction costs.

The Mayor’s ambitious target is based on both future need but also past under delivery, and the draft New London Plan identified how we build as being among the key stumbling blocks that have hindered housing delivery in London. In light of this, the GLA has expressed support for “precision manufactured housing” (their preferred term for housing built with MMC) in the capital, suggesting that improved construction skills training alongside a shift to MMC can help overcome the constraints of industry-wide skill shortages, as current construction models are not easily able to accelerate delivery in current market conditions.

In light of severe workforce pressures outlined in the report (ageing, reliance on foreign workers and few entrants in the profession), without embracing novel ways of building homes, delivering the Mayor’s ambitious housing delivery goals will be severely challenged.

Modular building in Holloway Road, by Victoria Pinoncely

UMT: Adam Curtis’s influential documentary ‘Inquiry: the great British disaster’ features the detrimental consequences of a supply chain where contractors capitalised on the perceived complexity of MMC at that time – what kind of oversight (internal and/or external) is there for contemporary MMC to ensure quality and quantity?

VP: ‘Inquiry’ showed the consequence of government putting unilateral pressure on councils to use prefab methods, with large subsidies for contractors but very little oversight and research and development before mass production. It also focused on the social housing sector, with social tenants bearing the brunt of poor quality construction.

This wave of MMC is very different, and in the case of councils embracing MMC, not imposed top down. Actors from all sectors have elected to use MMC; from large and small private for-sale and build to rent developers, housing associations, and councils and it is not limited to specific tenures. There is much R&D and experimentation in light of technological advancement, and hopefully lessons have been learnt from the past. Although design-led MMC has the potential to improve reliability, at present, the MMC industry lacks quantified evidence to compare the improved quality benefits of MMC with traditional building methods, but many traditionally built houses are also of very poor quality.

Interestingly, Sweden faced a similar wave of prefab, low-quality houses post-war – but contrary to the UK lessons were learnt and MMC wasn’t dismissed altogether, recognising it was an issue of contracting and bad workmanship, not the method itself. The country has now adopted prefabricated timber elements at scale.

UMT: Lewisham Council adopted a strategy using MMC to house 24 families at their PLACE/Ladywell location.  What are some of the barriers other boroughs face in adopting similar strategies using MMC?

VP: The upfront costs of MMC are one of the key barriers, as outlined above. Local housing companies such as Brick by Brick and BeFirst – which are growing in size as housing providers in the capital and the focus of a recent Centre for London report, Borough Builders – intend to build modular homes as part of their portfolio. As boroughs become developers, they are facing development challenges, including scaling up – but the speed of MMC certainly has a close affinity with councils’ aims to deliver housing quickly at local level.


Click here to access Centre fo London‘s report.

Our work on this aspect of housing delivery is covered under two main research themes: Alternative Housing and Constructing Construction. Click on the corresponding links to view our blog entries, reports, and events covering these themes.

About the author

Ulises Moreno-Tabarez

Ulises is a Postdoctoral Associate in the Department of Geography and Environment. He works as a Research Associate and Web Editor for LSE London. As an interdisciplinary geographer, his work focuses on migration, performance, development, and politics of race and ethnicity.

Posted In: Housing Crisis

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