Homes England exceeding its target for delivery of modular housing, boss says

News28.06.2312.00 PM by James Riding

Homes England is “materially beyond” its own delivery targets for modern methods of construction (MMC), despite modular builders’ recent woes, the agency’s chief executive has said.

Ilke Homes shuttered its factory in Knaresborough earlier this month (picture: Ilke Homes)

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Homes England is “materially beyond” its own delivery targets for modern methods of construction (MMC), despite modular builders’ recent woes, its chief executive has said #UKhousing

“We set targets for MMC delivery within the Affordable Homes Programme, and we are materially beyond those targets at the moment,” Peter Denton told Inside Housing.

The current Affordable Homes Programme, which runs until 2026, has a target that 25% of homes delivered through strategic partnerships must be built using MMC. However, Homes England’s other MMC targets have not been made public.

The agency has invested millions in MMC in recent years, including buying into Urban Splash House, the joint venture which collapsed last year, and investing £30m in Ilke Homes, the Yorkshire-based builder of modular houses which last week filed a notice of intention to appoint administrators.

Asked what the agency requires in return for its MMC investments, Mr Denton said: “We’ve done it by loans. We’ve done it by equity. People don’t realise: we do it by land. So when we sell land to house builders, we typically judge and score them on their bids for the land through a number of factors, but that will include MMC.”

In 2021, the government announced an MMC task force to accelerate the delivery of these homes. A 2020 report by Mark Farmer, its MMC champion, found that the government should set a target of 75,000 modular homes per year by 2030.

Mr Denton explained: “The reason that we get involved [in MMC] is because it’s government’s role to help stimulate and support a number of things, but not least early-stage intervention for important strategic and policy change.

“The average... construction worker isn’t getting any younger; the shortage of those workers is still there. The desire to continue to green the process and to reduce embodied carbon issues are still fundamentally there. So all the principles why MMC is important remain incredibly valid.

“And the agency, on behalf of government, had a key policy of taking early-stage equity, but predominantly debt positions, on category-one MMC, as well as other categories. And we recognise that came with inherent risk, but it was still the right thing to do, because we have to stimulate this market.”

Mr Denton said that category-two MMC, which includes panellised systems where walls, floors and ceilings are built in a factory and assembled on site, “is moving forward at real speed now and at volume”.

Earlier this week, Persimmon, the large house builder, announced a new panellised factory.

Homes England will continue to support both category-one and category-two MMC, Mr Denton added.