How much can government intervention affect the way houses are built? In the UK, the focus is on increasing the supply of new housing. With all the major political parties fully on board with this objective, one believes that Government will continue to focus on increasing the speed at which new houses are built. The question is, how should this be achieved?
The current government has focused most of its influence so far on incentivising the private sector through its central financial mechanism Help to Buy. Under this scheme buyers can access government loans to help them meet the cost of buying a new build house. Aimed primarily at first time buyers, this scheme has been a major stimulus to the housebuilding industry and it is estimated that around one in three new houses built this year will benefit from the funding. Even with this incentive, however, we are still not building anything near enough new homes to meet demand – a fact which partly explains the very high cost of housing. The principle of Supply and Demand economics suggests that a shortage in supply pushes up the cost of the product.
While very important, the Help to Buy Scheme is not sufficient on its own to have the desired effect and we are a long way short of reaching the Government’s 300,000 homes per year target. Couple this fact with an increasingly challenging labour market and it becomes very clear why Government is looking for new solutions.
Modernising building and diversifying supply
The preferred way forward is both to encourage the use of Modern Methods of Construction (MMC) and to support an increase in the supply of public sector housing, delivered through local councils and housing associations. Money is being made available to finance the building of such properties and, in many cases, this money is dependent upon the use of MMC. However, while enthusing about the need to revolutionise the process of building houses, the Government has been quite slow to define exactly what it means by the term MMC.
Many commentators have assumed that the term refers exclusively to modular construction, with complete homes built in factories and delivered to site on a truck. Proponents argue that manufacturing in this way will reduce the amount of labour needed for the construction process and will necessarily result in an increase in quality, durability and sustainability: all claims that are highly debatable and have yet to be proved.
Fortunately, common sense has prevailed, and earlier this year the Ministry for Housing, Communities and Local Government (MHCLG) published an MMC Definition Framework, setting out what constitutes MMC.
This pragmatic solution looks at a stepped approach, recognising that any industry takes time to evolve, and defining seven categories of MMC. At one end of the scale, Category One refers to the pre-manufacture of the entire 3D structure and at the other, improvements to site practice and the inclusion of new technology to increase efficiency are also recognised for the innovation and improvement they bring.
This approach provides a significant incentive for improvement, while allowing the housebuilding industry to be in control of its own evolution.
From an AAC perspective, it also ensures that the product innovations introduced over recent years are recognised as part of the solution for current and future housebuilding. We believe that our thin layer mortar system will be defined as a Category 6 MMC in recognition of its time-saving and increased accuracy. Our Celcon storey height AAC Elements should sit comfortably in Category 2, providing an offsite manufactured structural solution.
To a European audience it may come as something of a surprise to find thin layer mortar and autoclaved aerated concrete panels being described as Modern Methods, given that both have been widely used across the continent for decades. Eastland AAC panel and AAC block have been exported to many countries including New Zealand, Australia, US, Norway etc with good reputation.