Speech

Housebuilding: advanced housing manufacture

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Eric Pickles speech at Homes Event on the need for innovation in housing manufacture, and the government's investment in housebuilding.

The Rt Hon Sir Eric Pickles

Ladies and gentlemen

It’s a pleasure to be at the very first Homes Event with a session about advanced manufacturing in housebuilding. This conversation is important – because it’s an area of economic innovation that has been overlooked in this country. But it’s also symbolic – because it shows how far the housing market has come in the last 4 and a half years.

At the beginning of this parliament all the talk was about one subject. How to reverse the plummeting levels of housebuilding that we inherited from the last administration. There was too much desperation to talk about innovation. From day 1, fixing the broken housing market was a top priority, and much has been achieved since then:

  • 700,000 new homes have been delivered, including over 200,000 affordable homes – housebuilding is now at a 7-year high.

  • the planning system is working better and decisions are being made faster because we’ve cut red tape – last year councils gave permission for 230,000 new homes

  • local people now have a real say in decisions about development, and their attitudes are changing – support for new housing has shot up - from 28% in 2010 to 47% in 2013

This is progress we can all be proud of, but let me be clear – the job is not done.

We all know that when it comes to the housing market, resting on our laurels is not a strong foundation for future success.

The last government taught us that hubris doesn’t build homes.

We need to keep working hard – to consolidate the progress we’ve made, and boost the supply of new homes. The number of empty homes has fallen to a 10-year low, and we’ve permitted underused buildings to be converted into residential properties. But to build the number of homes we need the industry must diversify, and not simply rely on the same companies, building the same homes, in the same way.

Announcements this week

Throughout this week the government has unveiled new measures to help progress:

  • we’ll be relieving small housebuilders and self-builders from excessive section 106 charges

  • and we’re opening up the Builders Finance Fund, offering finance to build on the smallest sites – with as few as 5 homes.

The need for innovation

These measures will help diversify the industry, so it has a broader range of thriving housebuilders. But we also need to diversify the way we build new homes, and embrace new technology.

Over the last 50 years manufacturing and civil engineering in Britain has changed beyond recognition, and yet the way we build most homes remains remarkably similar. More innovation in housebuiding is long overdue, and it will be essential to deliver the number of homes this country needs. It will also be vital to build the well-designed, energy-efficient homes that people actually want to live in.

Advanced housing manufacture not only delivers high-quality homes, it builds them quickly and efficiently. Whether you are the biggest listed company, a small local housebuilder or someone who designs and builds their own home. I saw this for myself on a visit to an affordable housing scheme in Rainham during the summer. The homes were built in record time, at the rate of 1 a day.

The 34 townhouses and 16 flats have been praised for their high quality, and for achieving the Passivhaus standard. The homes were built by a small company, Climate Energy Homes. They were supplied by St Gobain, one of the largest construction companies in Europe. It proves the industry does not have to wait for the big companies to use advanced housing manufacture.

Small builders are already innovating, changing the way they work, and getting ahead of the market.

Construction companies that have not traditionally built homes, like Laing O’Rourke, have also spotted the potential and are starting to play a role in the housebuilding industry.

All housebuilders should sit up and take notice of schemes like this, because if they don’t, they risk being consigned to the slow lane.

So I’m delighted that Dennis Seal has just announced the first industry body – the Housing Hub – that will promote innovative construction throughout the housing industry.

You can count on the support of this government.

Together we can challenge the lazy stereotypes that equate this type of construction with the poor-quality pre-fabs of the past. There is simply no comparison. Homes built with advanced housing manufacture set the benchmark for the latest, cutting-edge designs. They’re built in highly controlled factory settings, and the parts assembled precisely onsite. It’s a method that’s being used widely in advanced economies around the world. By firms like Weber Haus and Huff Haus in Germany, and Sekisui Housing in Japan. Not only do these companies provide a perilous set of tongue twisters, they also represent the future.

Government investment

I want Britain to catch up, and we’re using government investment to make this happen.

Take our Housing Zones programme. Thirty brownfield sites across the country will be developed with £600 million of public funding, and we’re encouraging the use of advanced housing manufacture in this process.

Brownfield sites are often in built-up areas, where small plots and busy streets are a perfect match for these techniques. Well-designed homes can be finished quickly, and with the minimum amount of fuss or noise for local residents.

We’re also funding innovation through our multi-billion pound Affordable Housing Programme. So far a fifth of the all the homes in the programme after 2015 will be built using advanced housing manufacture. 8,000 homes – and that’s just from the first round of funding. This programme is providing smaller housebuilders with the breathing space to innovate, use different suppliers and try new ways of delivering homes.

So I’d encourage all councils, housing associations and developers to talk to the Homes and Communities Agency and see if they could use these methods during the second phase.

Building homes in this way has clear benefits for every type of tenure. For affordable housing providers it means you can develop sites faster, and get your rental streams flowing. Similar benefits can be experienced by developers building for private ownership. The prevailing wisdom dictates these sites must be completed slowly so developers can sell as they build. I believe this consensus is due an overhaul.

Builders for the private market who do use advanced housing manufacture have told us their buyers are more attracted to new build properties on sites that are finished – or soon will be. Homes built offsite don’t suffer the same problems with settling. Customer satisfaction is high.

Large numbers of custom and self-builders also prefer these building techniques. They appreciate the high quality, sustainable designs, and rapid construction.

We’re backing this market with our £150 million Custom Build Serviced Plot fund, which pays for the preparation of shovel-ready sites. It’s a growing market that’s attracting smaller builders, and I’d encourage all of you to consider getting involved.

Conclusion

Renters, buyers, and self-builders. All appreciate homes that are high quality and thoughtfully-designed. Ultimately customers will vote with their feet, so I’d urge all housebuilders to make sure they don’t get left behind.

We need to build more homes in this country. Homes that are:

  • well designed
  • affordable
  • energy efficient
  • and built quickly in the right places

Advanced housing manufacture meets all these requirements, and has enormous potential to create jobs and growth through a new factory-based industry.

I want to thank everybody in the room today for seizing the initiative and setting up the Housing Hub. You’re promoting innovation in housebuilding, and pointing the industry towards the future. It’s just what this country needs.

New homes for this generation and the next, and a strong economic platform for the future.

I look forward to hearing more about your experiences, and seeing the results of your work for myself in the coming months.

Thank you

Published 2 December 2014