21 Mar 2016

L&G moves into offsite housing construction with plans for £55m factory in Yorkshire

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L&G moves into offsite housing construction with plans for £55m factory in Yorkshire

Legal & General has launched a new modular housing business, Legal & General Homes, in a bid to transform the house building industry with offsite construction. Based in Leeds, the new factory will be the largest offsite factory in the world, employing up to 500 people and producing up to 3,000 houses a year, roughly eight a day. The first units are expected off the production line in June.

L&G Homes is looking to capitalise on offsite’s success in Europe, as it offers a flexible and cost-effective solution to housing supply. The factory expects to meet a range of models, from 20-storey apartment blocks to terraced, semi-detached and detached houses. Time spent building on site will be reduced by up to 70% when compared to traditional techniques. But key to the success of the project is to have the supply and demand balanced, so that the homes have sites to go to as soon as they are off the production line.

Initially it will focus on the creation of flats for Build To Rent as it represents the largest readily available market. But while the box formula of construction offers scope for optionality in terms of layout and design, L&G Homes stresses that individual tailoring of units would be too costly. Instead, it expects the model to allow for customisation that is then put into production as a run, so there will be a fixed number of the same type of home. “As it’s a production line, there is less scope for a one-off house, as it’s the run that allows you to factor in value for the houses,” commented a spokesman for L&G Homes.

Tom Ground, Chief Executive of L&G Homes, said: “The factory will deliver a new solution to the problems we face in the UK, addressing the shortage of suitable, affordable and sustainable housing by manufacturing higher quality, energy efficient, lower cost housing.”

The company plans to build more factories as it sees offsite as a massive part of  housing supply for the future, but initially it need to prove it’ profitability before it can capitalise on it further.

Editor’s comment

Offsite construction offers economies of scale combined with the benefits of precision, factory engineering and quick on-site build. This is an attractive proposal to the national housing shortage twinned with a construction skills shortage that’s a direct result of the stalled industry.

But on this scale it’s very much a volume solution, and how it would relate to custom build is yet to be seen – although there are offsite producers, such as Potton, who are successfully using offsite for construction. But where offsite is exciting is in the question of what does affordability look like, and this is where it could work brilliantly with custom build. As a model it would suit larger custom build developments where people can choose the type of home they want from a fixed range of configurations, fixtures and finishes, offering the best of both worlds in that it gives buyers more choice, while bulk production runs helps to build in value.

 

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