UK Residential: Why Offsite Construction is ideal for Build to Rent (PRS) schemes

Residential: Why Offsite Construction is Ideal for Build to Rent (PRS) schemes

In this article, Michael Swiszczowski, our residential sector expert, discusses why Offsite Construction methods are Ideal for Build to Rent (PRS) schemes in the UK.

Offsite construction has been in existence for some time and has been viewed by many as a niche market related to the ‘prefab’ projects of the post war years. Things are changing fast. Contractors and developers are regularly talking about the merits of modular construction and, increasingly, large multi-national companies are making offsite a key component of their future growth strategies. This trend will grow exponentially over the next decade and beyond.

What are the key offsite construction issues that you need to be aware of and how can you benefit from this form of construction in your Build to Rent (PRS) developments?

The problem of scale

The problem with offsite construction until recently has been one of scale. Until the major developers and contractors, including L&G and Laing O’Rourke, start producing their offsite housing products in large enough quantities the market will be limited in its ability to expand. Just consider the innovative ‘Just in Time’ process which has been employed at the Mini Cooper production line in Cowley, Oxfordshire, UK. Laing O’Rourke intends to implement the same principle in its new factory in Worksop, Nottinghamshire once it starts production. The intention is to manufacture a ‘product’, modular boxes prefinished to a high standard, in a market where there is a shortage of skilled labour. Robotics will play an important part but, like the Mini Cooper factory in Cowley, relatively unskilled people can be trained easily to become ‘multi-skilled’ carrying out production tasks to a high standard. Controlled factory assembly conditions such as these offer huge climatic and quality control advantages. Laing O’Rourke’s factory, like the Mini Cooper, will use the ‘Just in Time’ Japanese production line principle to enable the standard boxes to be finished to different specifications without having to stop the assembly line. All the components for a particular box arrive at the correct point in the process - just in time. The PRS or Build to Rent market, as it is being increasingly referred to, requires high quality, easily maintained finishes to reduce maintenance costs and this should be factored into the cost plan.

Target market

With modular construction methods at scale becoming a reality, the opportunities which lie ahead for PRS housing developments to benefit from offsite construction are huge. The PRS/Build to Rent sector is much more mature in the USA where they have gold, silver and bronze categories depending on location, numbers of apartments and facilities provided. The PRS sector, by force of necessity, will gradually mature in the UK as well. It is the predictability of the design criteria within a PRS project which point towards modular production at scale as the optimum solution. Ideally a contemporary Build to Rent community should be based on courtyard design principles where possible, with a soft glassy centre and a more robust exterior responding to the context. Typically the target demographic would be ‘Generation Rent’, the 25 – 35 age group – particularly people in employment but who will take ten years to save for a deposit to buy a house. In this respect it is somewhat akin to student housing given its emphasis on friends, family and facilities. It responds to a ground shift in people’s perceptions of what makes for a happy and welcoming living environment.

Meeting the space standards

In the UK, optimum module room sizes will take account of the London Plan or Nationally Described space standards. The task is to find the optimum box size which multiply up to suit the mandatory living areas without the need for any escort or police notification during transportation from factory to site. Providing some balcony areas within the boxes can help to ensure that the correct net internal area for compliance is achieved. Such a system would not necessarily be restricted to the PRS market. The same design criteria apply whether the apartments are private-for-sale, social affordable for rent or shared ownership*.

Meticulous pre-planning required

An offsite construction product can’t be done on the cheap and requires meticulous preplanning before it goes into production. It becomes more economical at large scale which is why the market for modular housing will not begin to burgeon until the big development companies have established their production facilities. Until this happens there are other options. At Chapman Taylor we are currently building a hotel using modified shipping containers. There is the impressive Pukuokka Housing Block in Jyvaskyla in Finland which won last year’s UK’s Wood Award. This is a rare example of volumetric cross-laminated timber which uses an inherently green material as its main structural component. Steel framed options such as Caledonian Modular’s system which has been developed over the last twenty years are also available. The longevity of such systems is testament to their success. The perception in the market at present is still that offsite construction is expensive but the counter-argument is that any perceived additional cost relating to the modules are mitigated by time savings on site, earlier receipt of rent, reduced risk, and reduced maintenance cost over the cost plan period.

Size Matters

Working throughout the UK we find that slightly smaller apartment sizes are favoured by different local markets. This is the approach taken in Manchester, Leeds, Exeter, Plymouth and other locations where we are currently working on PRS projects. The communal sitting and eating areas within a PRS community more than compensate for this adjustment. A Build to Rent investment must have a degree of certainty over ‘size’ for at least a ten year period. Ensuring that the size provision will meet with local market approval well into the future is essential and raises a question over the suitability of some of the very small apartment sizes which we have seen being built recently. It is possible to design in a compact and efficient manner but there are limits where layouts become so compromised that the quality of the living environment becomes less than desirable.

Branded Build-to Rent – Not ‘Prefab’

I believe that the stigma attached to ‘prefab’ housing is a thing of the past and that modular Build to Rent is where the future lies for mass housing in city centres. In the UK, we are fast reaching a tipping point where a shortage of construction skills and an increased need for quality, speed and scale for housing will shift construction from site into factories. The dominant method at present requires us, in effect, to build every new building as a prototype with all the attendant problems of fitness for purpose which that entails. Surely for mass housing in the future the answer must lie in the processes which the car industry has adopted which enable rigorous testing of the prototype before it goes into production. The predictability of branded Build to Rent layouts and finishes ensure that all the major decisions about structure, services, specification and finishes can be taken early on in the design process. This is why Build to Rent housing is ideally suited to the modular off-site process and a viable solution for the housing crisis.

^{* Our own ‘Umbrellahaus’ design responds to all these aspirations and can be adapted to suit any context. We have found that local authorities are generally prepared to negotiate the percentage of the affordable element within a development if the developer can prove that too much affordable makes the project non-viable. LAs or the UK government may be inclined to cooperate in providing the land but this is not essential. We have recently been approached by companies who are keen to work with us to assist them in developing their own brand.}