Boost for modular housing construction

Published by Glenigan on 2nd July 2019 -


Modular housing work is gaining pace with a series of new deals that are providing a boost for offsite manufacturing in the residential sector.

Ilke Homes has won what is believed to be the biggest single modular housing contract with a £100 million deal to supply 750 modular homes for social housing giant, Places for People (Glenigan Project ID: 19181842).

Ilke chairman Dave Sheridan said: “Ride-hailing apps have replaced standing in the rain to flag taxis, so it makes sense that we embrace the benefits of manufacturing homes in dry factories. A mature OSM [off site manufacturing] market could create an “Uber moment” for construction, speeding up delivery, cutting cost and giving our customers unrivalled choice and quality.”

Ilke is a joint venture between housebuilder Keepmoat and offsite specialist Elliott Group and only opened its 25,000 sq m factory opens in Harrogate last year.

Glenigan’s construction research shows that Ilke is working on a number of other developments including 119 units at Millwood in Liverpool  Glenigan Project ID: 17005870) and 54 homes at Firs Farm in West Sussex (Glenigan Glenigan Project ID: 18435714).

Urban make a Splash

The Ilke deal followed an announcement that Urban Splash, which also only moved into modular housing last year, has formed a partnership with Japan’s biggest housebuilder, Sekisui House.

Sekisui House have invested £22 million of new equity in return for a 35% stake in Urban Splash’s modular business, House.

A further £30 million of equity and debt funding will come from the Government’s Home Building Fund, which is administered through Homes England.

Sekisui House president Yoshihiro Nakai, said: “Using modern methods of construction to build high quality homes with short build times is one of our company’s great strengths. Our technology and know-how can help resolve pressing social issues in the UK.”

Manchester-based residential developer Urban Splash moved into modular housing with last year’s acquisition of the loss-making Building Systems business from materials group SIG.

Building Systems had revenue of £9.2 million in 2016 but lost £5.7 million and Urban Splash paid just £1 in a deal which included a factory employing 70 staff at Alfreton in the East Midlands.

Just weeks after confirming the Sekisui deal, Urban Splash announced a £75 million deal to supply 440 modular homes for Homes England at Northstowe (Glenigan Project ID: 1903816).

Other players

Insurance company Legal & General is also investing modular housing and has built a factory outside Leeds that will be churning out more than 3,000 homes a year by 2022, mainly for the affordable housing sector.

“Affordable housing is a classic example of under-investment with minimal new equity capital being deployed to the sector,” said L&G chief executive Nigel Wilson last year.

Persimmon’s modular housing business Space4 is also expanding. Space 4 delivers around delivered 6,000 timber frame house kits and insulated roof systems to Persimmon’s housing businesses form a factory at Castle Bromwich near Birmingham.

Production is now being expanded to 9,500 units per year- 7,750 timber frames and 1,750 roof systems, providing further evidence of the increased demand for modular housing as skills shortages bit in the run-up to Brexit.

Ian Bellamy

Glenigan is the trusted provider of construction project sales leads, industry data, analysis, forecasting and company intelligence. Glenigan combines comprehensive data gathering and exhaustive research with detailed statistical modeling and expert analysis .

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