L&G, TopHat push for homebuyer grants on zero carbon homes + Farmer's Cast to help hatch offsite housing plan
News, views and more from the modular construction space
Boris Johnson and his government continue to spout forth on ways to save the planet.
But how do we actually get to net zero by 2050?
Housing has been identified as a key target in cutting carbon due to the amount of energy used in homes. Much of the focus so far has been on the current housing stock, which makes up the vast majority of homes.
But what of new stock?
Last week’s Future Homes Standard aims to get building regulations up to speed, but MMC was scarcely mentioned in the 114-page document.
I've been speaking to the MD of TopHat, who suggests the government should be looking at offering grants to encourage homebuyers to take the leap on zero carbon homes. In turn this would inspire manufacturers to invest in ultra eco homes.
Another sector giant, Legal & General, has also this week revealed to Modular Monitor it has been lobbying the government on the issue.
We have grants for electric cars and retrofitting old houses, so why not a cash incentive to buy hyper energy efficient homes?
They could prove popular in the UK’s first zero emissions city, which was touted in the government’s Gear Change manifesto last summer aimed at promoting cycling and walking.
Either way, watch for the action not the words.
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*NEWS*
Government should consider homebuyer grants for zero carbon homes, say sector giants
TopHat and L&G have said the government should consider offering housebuyers a grant to encourage them to buy zero carbon homes.
Andrew Shepherd, managing director of Goldman Sachs-backed TopHat, told Modular Monitor the industry could “embrace the sustainability approach” even more if the government offered grants to property buyers.
Shepherd, who joined TopHat in October last year, was speaking following the publication of the government’s long-awaited response to the Future Homes Standard consultation last week (see Offcuts below).
Under the new standard, the aim is for the “average” new home to produce “at least” 75 per cent lower emissions than those built to current building regulations.
The government’s ambition is for all new homes to be “zero carbon ready” by 2025.
However Shepherd, a former Laing O'Rourke and Land Securities executive, said the Future Homes Standard was a “stick” and there wasn’t enough “carrot”. He added: “If you offer a grant it will encourage people to start thinking about investing.”
TopHat has yet to deliver any zero carbon homes but is understood to be in conversations with clients about plans.
L&G is also keen on promoting zero carbon homes and has been lobbying the government on the issue. A spokesperson told Modular Monitor it was “fully supportive” of TopHat on the idea.
“We have actively been lobbying government ourselves for this and are very much leading the charge,” the spokesperson added. “It is part of our plan for the near future to offer zero carbon homes as part of our modular homes.”
Last summer L&G committed to making all new homes across its entire housing business zero carbon by 2030.
Ilke Homes is also beginning to embrace these types of homes. A year ago the firm delivered nine zero carbon units for a developer, with its boss Dave Sheridan saying at the time that “far too many new builds are failing in terms of their energy efficiency”.
He added: “By switching to offsite manufacturing, we can quickly deliver the zero-carbon homes of the future.”
Separately, Nigel Banks, Ilke’ director of specialist projects, said while the government’s response to the Future Homes Standard was “welcome”, the timetable for implementation was “too slow”. He said “over a million new homes” built between now and the standard being implemented would need to be retrofitted.
Meanwhile, Shepherd also talked about TopHat’s mooted plans for a second factory.
“It’s still very much in the discussion phase at the moment,” he said. There’s a lot of energy going into how we can improve our manufacturing processes and then deploy that into a new factory.”
But he added: “There is no definitive date in terms of getting a shovel into the ground (for a second factory).”
In the last edition of Modular Monitor, a senior executive from Ilke said it was planning a second factory by next year despite being partially affected by a slowdown in business due to Covid-19.
Shepherd said TopHat had seen a “slight drop” in productivity in its Derbyshire factory of around five to 10 per cent as a result of the pandemic. “We are taking a little longer to do things as we just had to rethink how we undertake each individual task,” he said.
On TopHat’s finances, Shepherd said the business was well capitalised. But he said it would likely need fresh investment on top of the £75m Goldman Sachs injected if it wanted a new factory.
Like Ilke and Legal & General, TopHat has suffered significant losses due to start-up investment costs.
Shepherd said: “Our aspiration is to get as profitable as quickly as possible. We can see that with the opportunities we’ve got in the very near term. But we’ve not put a particular timeframe on doing so.”
In terms of his own role, Shepherd, who joined TopHat from consultancy Mid Group, said his focus is the “delivery side of the business”, including “working with clients”, “identifying new opportunities" and the “delivery of projects on site”.
He said Jordan Rosenhaus, TopHat’s founder and chief executive, “has an impassioned focus on the factory itself and the manufacturing processes”.
*NEWS*
Housing association offsite alliance calls in Cast to develop business plan
A 19-strong alliance of housing associations has hired Mark Farmer’s Cast consultancy to help it draw up a business case as it targets delivering 9,000 offsite homes a year.
The group, Offsite Homes Alliance (OSHA), has so far recruited 19 social landlords from the north of England with the aim of working with offsite suppliers to drive the uptake of factory-built homes.
Speaking to Modular Monitor this week, Mike Ormesher the OSHA’s project director said the business case would “set the ambition of the alliance and understand the lessons learned that have gone before”.
He added: “It’s the modus operandi of the alliance to make sure it doesn't veer away from its ambition.”
The alliance is aiming to publish its business case by March.
Ormesher is hoping other registered providers will join the group and revealed it is in talks with Homes England about the initiative.
Jeff Endean, a director at Cast, said: “Cast will bring our experience of working across the full spectrum of the MMC development process, from design through manufacturer to on-site delivery to ensure OSHA’s strategic plans can be delivered in practice.”
Cast has a three-month contract with OSHA.
A full list of housing associations involved with OSHA can be viewed here
*OFFCUTS*
POLICY: MMC received a total of two mentions in the government’s delayed 114-page response to a consultation on improving the energy efficiency of new homes. In the Future Homes Standard response, the government said it will “carry out wider work to consider the future of energy efficient and low carbon buildings”, beyond the scope of building regulations. It added: “This will examine some of the broader and more fundamental questions around how we can ensure that all new buildings are designed and constructed to be fit for a zero carbon future, including those raised through the consultation process, such as the role of modern methods of construction and low carbon materials, including timber, in delivering low carbon construction where these can be used safely.”
PEOPLE: Nick Walkley, a vocal advocate of MMC, is to leave government agency Homes England as its chief executive next month. In his near three-year tenure, Walkley oversaw the transformation of the body from the Homes and Communities Agency to Homes England.
DEALS: Developer Citu has secured a £19m loan to build 120 “low carbon” offsite flats and houses as part of its wider plans in Leeds. The firm, which has an offsite manufacturing facility in the city producing timber frame units, is aiming to deliver more than 800 homes in four phases at Leeds’ South Bank next to the River Aire. The loan is from Ingenious Real Estate Finance.
SCHOOLS: Construction giant Morgan Sindall has bagged contracts worth £13.5m to upgrade two schools in Hertfordshire using offsite methods.
DEALS: Ikea and Skanska-backed modular homes firm Boklok has struck a five-year deal to build "more than" 750 homes for Hampshire-based landlord Abri.
*NUMBER CRUNCH: 70+*
Global hotel chain Marriott has used modular construction on more than 70 of its hotels across North America since 2015, according to this article in the New York Times.
Marriott is expected to lift the curtain on the tallest modular hotel in the world - the AC Hotel NoMad in Manhattan - this year, according to the NYT. Construction on the 26-storey, 168-room development began in 2019.
New York City-based Danny Forster & Architecture were the architect of record and interior designer on the project and kindly supplied the picture above.
*AND FINALLY…*
If you’re interested in the future of councils’ finances, you can read a piece by me in the print edition of this month’s Inside Housing. The backdrop to the article is the on-going troubles at Croydon Council. Incidentally, and separately, Croydon is currently home to the world’s tallest modular tower, with plans for an even bigger one in the pipeline.
Thanks for reading and see you next time,
James
I’m James Wilmore, a freelance journalist and editor. I cover the built environment and occasionally cycling. This is me here and here
For all enquiries, story ideas and tips, please email: james@modularmonitor.co.uk