Council homes delayed after modular house builder enters administration

Sam Manners House comprised 32 homes, including eight houses, and was due to complete this year. The Brooks comprised 80 homes, including 58 family homes and 22 flats, and had a development value of £32m.

A spokesperson for the London borough told Inside Housing: “One of our contractors, Elkins Construction, had appointed Modpods to deliver the homes on two of our Greenwich Builds sites at Sam Manners and The Brooks, which are currently affected.

“Modpods going into administration is frustrating news that sadly will delay delivery of some of our new council homes.”

The council said it was working with Elkins to “understand how it will manage the impact of Modpods’ administration and agree a solution to getting the homes built as soon as possible”.

It added: “We understand that for neighbours and residents around these affected sites it prolongs the uncertainty. As soon as we have a clear way forward, we will share this with local residents.”

Greenwich also pointed out that Modpods was one of several modular house builders to have entered administration in recent years, with the industry struggling with cost inflation and supply chain challenges.

Earlier this month, Modpods’ administrators, KRE Corporate Recovery, said that relocating the builder’s trading premises had been “significantly more costly and took much longer to finalise than anticipated”. Modpods had sought to find a new factory to scale up building to 1,200 homes a year.

The relocation delays resulted in the company being closed for “a number of months”, putting “significant pressure” on its cashflow and a dispute issue with an existing client, KRE said.

The administrators also blamed “extremely difficult trading circumstances” for the collapse.

ModPods was founded in 2017 by Andy Cornaby and Pete Farrelly, who specialised in asset management and social housing contracting, respectively.

The company designed and built offsite steel-framed modular houses in its factory in Kenilworth. On its website, it claimed to offer “comfortable affordable homes at two-thirds the cost of traditional built housing”.

It delivered its first project in 2019, a two-storey, two-bedroom prototype pod for Birmingham City Council’s housebuilding arm, BMHT.

The builder also completed 24 homes across eight sites in Coventry for Citizen Housing and Coventry City Council.

It had signed contracts with Nuneaton and Bedworth Borough Council and Broadland Housing Association in Norwich.

It posted fixed assets of £1.6m in its most recent results for the year to 31 March 2023, while current assets were valued at £3.7m. At the time, it owed £2.3m to creditors, with net assets approaching £852,000.

KRE said it had completed a pre-pack sale of ModPods’ assets to HPG Developments, an industrial and commercial property developer based in the Midlands.

Modpods is the latest modular house builder to fold after a torrid few years for offsite developers. Last year, Ilke Homes and Legal & General Modular Homes collapsed, while House by Urban Splash, a joint venture between developer Urban Splash, Japan’s Sekisui House and Homes England, went into administration in 2022.

Earlier in August, TopHat, another modular builder, narrowly avoided two winding-up petitions from a developer after it settled out of court. The legal actions were launched on 1 July by Yorkshire-based developer Harworth, which is a creditor of TopHat.