30 August 2018

In 2016, I wrote a review of the UK construction industry called Modernise or Die. It made a series of recommendations aimed at the Government, the construction industry and also the development industry that ultimately commissions construction work.

One of my main observations was that the capacity of the construction sector is insufficient to deliver the political ambitions for new infrastructure and homes. More worryingly, this is likely to decline by 20-25% over the next decade due to the demographic profile of the existing workforce and a lack of new talent entering it.

This observation has helped set in motion a series of initiatives, in terms of policy development and industry actions, aimed at addressing the issue we have to urgently resolve – industry productivity. If we cannot deliver more with the same or less resource we are likely to fail in our homebuilding aspirations. This will lead to build cost inflation as well as increased incidences of poor quality work. It is clear to me that this is already happening.

My review highlighted the importance of increasing the ‘pre-manufactured value’ (PMV) of our homebuilding schemes. This is a measure of how much on-site labour is required to deliver any given amount of pre-manufactured content, ranging from normal individual components to full modules. Put simply, the higher the PMV, the less on-site labour needed, and this should be a good proxy for productivity, certainty, speed of delivery, safety and quality.

It is the last criteria of quality that I’d like to develop further. The market interest in offsite manufacturing, which includes many different approaches, has exploded in the last 18 months or so. This is a good sign, in that the awareness of the need to change our construction delivery techniques is higher than it’s ever been. However, there remain some critical barriers to overcome.

The UK offsite supply chain is still relatively immature and risks being overrun by a spike in demand or taking on work which can’t be quality assured. It’s important to bear in mind that residential construction innovation has to be subject to a higher level of scrutiny than offsite solutions that might be used in the education or health sector, for instance. Buildings and houses have to be capable of mortgage or long-term institutional financing, as well as being able to secure reinstatement insurance on normal.

Properly vetting manufacturing systems and processes, and integrating this into a site-based environment, is vital to securing warranties and assurances to enable the manufacture-led residential market to grow responsibly and safely. Applying this quality filter to the diversification of the UK’s housing production techniques is vital in reaching the construction solutions that will enable us to deliver 300,000 homes per annum or above, without stoking cost inflation and actually improving quality across the board.

I’ll be discussing this further at the National Housing Federation’s Housing Summit in September.

Mark Farmer

Mark Farmer is Founder Director and CEO of Cast Real Estate & Construction Consultancy

Mark has nearly 30 years of experience in the construction and real estate sectors and has become a recognised commentator and thought leader on a variety of issues.

Mark has been at the forefront of emerging UK residential market segments such as build to rent and later living. He is also playing a leading role in modernising the construction industry through the adoption of greater levels of pre-manufacturing using more integrated and digitally enabled delivery models.

Mark is a member of the RICS, Vice Chairman of the ULI UK Residential Council, a member of the BPF build to rent sub-committee and co-chairman of Constructing Excellence.

Mark authored the October 2016 UK Government Review of the Construction Labour Market Model entitled ‘Modernise or Die’.

Tackling the barriers to building new homes – it’s all about the quantity and the quality