You are viewing 1 of your 1 free articles
Aggregator to start accepting modular homes as security
Housing association debt aggregator The Housing Finance Corporation (THFC) is looking to take on modular homes as a form of loan security, Inside Housing can reveal.
The aggregator has stated its intention to begin accepting homes built using modern methods of construction (MMC) in order to monitor its performance over time and bring it in line with traditional forms of security.
MMC, in which homes are manufactured offsite and assembled on site, has become increasingly popular with house builders and housing associations in recent years. Although it has yet to become a fully mainstream form of building, several organisations have invested in new modular factories or signed partnerships with modular builders in recent years.
However, many lenders have been reluctant to use MMC homes as security because of the nascent nature of the sector and questions about its longevity.
Piers Williamson, chief executive of THFC, told Inside Housing: “I think time has come for action now, so we will be doing a bit of work around promoting the use of modular as security.
READ MORE
“Over the next couple of months we are going to look to partner with one or two of the leaders in this area because we think that is the responsible thing to do.”
Lenders have raised questions over the viability of modular as a form of long-term security, given it is a relatively new form of construction, and although some have said they will accept modular homes as security, this is still uncommon, Mr Williamson said.
He cited growing concerns about Brexit-related skills shortages and supply chain issues as evidence that volumetric modular construction will become more important. Mr Williamson also noted that controlled production in factories can help mitigate the risks brought by COVID-19.
“We think it will be a good initiative to get some of this in charge and look at how it performs over time. That, itself, gives comfort to the lending community that it can represent the new normal,” he added.
The move comes as warranty providers signed a memorandum of understanding agreeing to introduce a minimum standard for assessing homes built using MMC, in attempt to boost lender confidence in new housebuilding techniques.
