ilke Homes’ new board member gives his outlook on the future of MMC
Last month, we announced that Stephen Stone, the former chief executive of FTSE250 housebuilder Crest Nicholson, had joined the board of ilke Homes to help power the company’s continued growth.
Stone, who has years of experience in the construction and housebuilding sectors, joins at a time when our business is growing exponentially. When asked about his reasons for joining ilke Homes’ board as a non-executive director, Stephen told Property Week: “I have been hugely impressed by the team’s dedication to creating a genuinely positive impact and to building a business that has tremendous growth potential.”
For the last decade or so, Stone has been championing modern methods of construction (MMC) as a solution to many of the construction and housebuilding industries’ woes. Back in 2016, and while chief executive at Crest Nicholson, Stone was interviewed by Building in which he warned of the growing skills crisis with much of the labour force retiring declaring that housebuilders needed to make more use of MMC.
Fast forward five years, and soon-to-be-introduced building regulations, which will force developers to build greener homes, and continuous issues surrounding build quality mean “a step-change in the way we build homes is coming, whether you like it or not”, according to Stone.
The term ‘modern methods of construction (MMC)’ has been banded around the construction and housebuilding industries for some time now, but it has only been in the last six to seven years or so that stakeholders have begun to consider them a game-changer.
The market share of volume housebuilders has almost doubled from 31 percent in 2008 to 59 percent in 2015, according to a parliamentary report, as smaller firms – beset by tighter lending criteria, planning delays and lack of resources – went out of business. But while some have been more forward-thinking than others – for example Crest Nicholson said back in 2018 that it hoped to build around 15 percent of its homes using offsite manufacturing (OSM) by 2020 – others still continue to deploy the same methods to build homes used almost a 100 years ago.
However, change is on the horizon, and whether it is forced on housebuilders or they embrace it, a step-change is certainly happening.
The construction industry, as we are all aware of by now, is one of the UK’s biggest emitters of carbon – responsible for 40 percent of our nation’s total. Meanwhile, the operational emissions from the UK’s housing stock stand at around 20 percent of the UK’s total, according to the Committee on Climate Change.
Offsite manufacturers, such as ilke Homes, who deploy precision-engineering techniques along production lines in factories to deliver high-quality, energy-efficient housing, are well placed to offer a solution to this.
In February, the Government announced its long-awaited decision on the Future Homes Standard. As part of new building regulations, all new-build homes constructed from next year onwards will be expected to produce 31 percent lower carbon emissions. New homes will also be required to have “low-carbon heating” and to be “zero carbon ready” by 2025, the Ministry for Housing said.
Cash-strapped councils and housing associations (HAs), who have suffered from cuts in central Government funding and a lack of skilled resource, may struggle to meet these targets – this is where modular housing can step in.
ilke Homes is able to deliver zero-carbon homes now. In layman terms this means that the home’s operation emissions – those emitted via utilities such as heating, hot water, ventilation and lighting used by the home – are reduced by 100 percent.
Our zero-carbon offering, branded ilke Zero, will help councils and HAs avoid costly retrofitting programmes down the line, as homes are built to exceed new building regulations, and partnered with our turnkey offering, by which we take charge of the whole construction programmes, their resources need not be stretched further than they already are.
Another issue that plagues the housebuilding industry is quality. While some mistakes are to be expected in a product as complex as a home, 97 per cent of buyers reported snagging problems or defects to their builder last year, according to the 2020 national new home customer satisfaction survey.
In an age where technology is helping transform industries beyond recognition – such as car manufacturing and aviation – it’s time for housebuilding to have its day of reckoning. By using precision-engineering techniques that are more similar to Formula 1 than housebuilding, we, at ilke Homes, are able to deliver homes that are free of snagging issues.
Lastly is the skills crisis that has been decades in the making. The rate of retirement in construction looks set to increase as 22 percent of the workforce are over 50, and 15 percent in their 60s. Compounding this issue is the fact that less and less young workers choose construction as a career path, while the new post-Brexit ‘skills-based’ immigration system threatens to reduce the industry’s access to talent from the Bloc.
OSM doesn’t draw from the same talent pool as construction. Therefore, it has the ability to ramp up housing delivery without placing an extra burden on skills availability. In addition, unlike a traditional construction site where young workers learn a specific trade – e.g. carpentry or plumbing – OSM provides a worker with transferable skills, such as in digital design and operating complex machinery, that can be used in other manufacturing arenas – such as car manufacturing.
If we’re going to tackle the problems posed by new building regulations, poor build quality and the skills crisis, then a step-change in how we build homes is needed. While not the whole solution, factory-built housing can bring much-needed additionality to the market.