Building Modular Homes Will Become the New Normal

Building modular homes has emerged as a leading solution to many of the housing problems facing the UK and Europe. Increasingly popular in many countries across the continent, UK construction firms are also turning to modular housing as a cheaper, faster, and more eco-friendly alternative to conventional buildings.

Below we examine the argument that these advantages will lead modular home building to take its place as the new normal. We consider its benefits to construction firms, homeowners, and government entities and envisage a future where modular housing is a dominant player.

Let’s get started.

The Rise of Modular Home Buildings

Rise of Modular Home Buildings
Ruum by Ruum Tiny Houses

The future of housing has long been a lively debate. From post-war housing estates to arguments about building on green land, solutions have consistently arisen and then been hotly contested over the last 80 years or so.

No universal consensus has yet emerged: but the construction sector is seeing the growing waves of a quiet revolution in home building.

Modular home building started capturing the public imagination in the late 20th century. It lent itself to a popular, minimal, Scandinavian-style aesthetic[1] and championed the increasingly pressing issue of sustainable construction. It also offered extremely low construction costs compared to traditional methods.

However, mortgage lenders were initially cautious. Buyers found it difficult to obtain financing for these new builds, and the wave was somewhat stalled.

Since then, improved fabrication methods and greater awareness of the advantages of modular housing have begun to change that picture. It is increasingly easy to find lenders for building modular homes, and construction firms, as well as consumers, have realised this.

Why Building Modular Homes is Becoming More Popular

The relationship between supply and consumer demand in real estate and construction is different from any other sector. The vast investment required for large construction projects and the associated risk that construction companies take on mean that progress is often slow. National and local government regulations also slow down the process.

Moreover, consumers often consider themselves a “captive audience,” shopping in the existing housing market rather than forcing new supply trends by ordering construction projects.

Prefabricated housing is approaching a “mature” stage in how it is viewed by industry experts. Prefabricated homes have been proven to stand the test of time and appreciate in value just as well as most conventional buildings. This removes a great deal of risk for construction firms and their investors.

Below we outline how modular construction addresses the concerns of construction companies and why an increasing number of firms are considering it.

1. Faster Construction

The on-site assembly process is extremely quick for modular housing. Assembly typically takes a matter of weeks. This is because fabrication is conducted off-site in controlled factory settings.

This drives down costs across the board. A shorter assembly time means a project can be completed swiftly and the cost of equipment rentals, power use, and staff hours is dramatically reduced. Each day spent building on-site is enormously expensive for large-scale projects. Building modular homes is cost-effective for builders in this way.

2. Fewer Delays

Delays are another huge expense in construction. Especially in the UK, where inclement weather is all-too-common, projects can be delayed by rain and poor conditions for weeks or even months. Delays lead to projects running way over their intended budget and also create bitter disputes with nearby residents and local authorities.

3. More Environmentally Friendly

Eco-friendly construction is increasingly a priority for buyers and construction firms alike. Modular housing involves significantly less environmental waste than conventional construction, especially concerning environmentally toxic materials such as concrete.

The streamlined fabrication process minimises waste, while the reduced need for heavy construction machinery cuts down on mileage.

4. More Controlled Process

An outdated criticism of building modular homes is that the standard would be inferior to conventional methods. Not only is that demonstrably untrue, but when conventional housing projects run overtime and over budget[2], residents are left unsatisfied with rushed work.

The factory-controlled fabrication process makes this extremely rare in modular home building. Shorter fabrication and assembly times mean that there is more time for firms to address residents’ concerns where complications arise.

Why Modular Housing Appeals to Consumers

While construction companies are increasingly seeing the benefits of modular housing, consumer demand must be there to meet supply for projects to be given the go-ahead.

An unstable housing market has led many consumers to consider alternatives to finding their place in home-buying “chains”[3] that often collapse and offer limited options. This has led consumers to better understand the advantages of modular housing.

Consumer demand is growing to a point where larger-scale modular construction projects will become a desirable option for developers and their investors. Below are the key benefits that consumers identify.

1. Much Cheaper

The cost of buying a prefabricated home is significantly lower than purchasing a new-build house that uses conventional construction methods. Especially in expensive areas of the UK like the South East, it is also markedly cheaper than buying a house from the available stock.

The cost of owning a house represents a significantly greater chunk[4] of individuals’ earnings and savings than it used to. Many consumers baulk at mortgages in areas where property prices have risen unsustainably. The lower cost of a prefabricated house is, therefore, increasingly attractive to buyers.

2. Less Risky

As noted, many conventional housing projects overrun their planned timescale. This can be a headache for consumers, who may not be able to move into their new homes when planned or may find defects when they move in.

The shorter timescale and controlled fabrication process of modular housing minimise this risk.

3. Greater Personalisation

Homeowners find themselves faced with a very small range of houses in their own area that are within their budget and personally appealing. New-build prefabricated homes offer a much greater selection of design options. This is advantageous for long-term buyers who want their new house to feel like “home” from the word go.

4. Lower Carbon Footprint

Consumers are increasingly[5] environmentally conscious. This is reflected in buying habits from food to real estate.
The lower carbon footprint of modular homes[6] makes them more attractive to consumers. This is only likely to increase as urgency around the climate crisis intensifies.

5. Greater Increase in Property Value

A pressing concern amongst homeowners is whether their property will appreciate. This was a question mark over prefabricated buildings in the past – but no longer.

Once a prefabricated home is finished, it can be surveyed by a realtor and assessed on the same grounds as any other property. Given the significantly lower construction costs, the home is likely to appreciate much faster once established than a house made using expensive, conventional methods.

6. Mortgages Are Increasing Available for Modular Housing

Likewise, it is easier than ever today to find a lender offering good terms on a mortgage for building modular homes. Lenders’ willingness to offer stable mortgages to buyers is the final piece in cementing modular homes’ increasing availability and popularity.

Final Thoughts: Modular Home Building is More Accessible Than Ever

Construction firms, consumers, and lenders are coming to understand that building modular homes is

  • More sustainable
  • More cost-effective
  • More reliable
  • The future of house building in the UK and across Europe.

Property development may move slowly, but the tide is turning. Keep an eye out for more developments around modular home building – we cover every moment on our blog.

FAQ

Is modular construction more sustainable?

Yes. The fabrication and assembly process uses far less energy than conventional methods[7]. There is also less waste generated.

Are modular homes a good investment?

Yes. Well-constructed prefabricated properties appreciate very quickly upon completion. The lower construction costs make them a sound investment.

Is 2023 a good time to build a house?

There has never been a better time to consider a new-build prefabricated home. In an unstable real estate market, modular housing is perhaps the best housing choice for 2023.

References:

[1]https://www.tandfonline.com/doi/full/10.3402/jac.v8.32573
[2]https://cinmagazine.co.uk/the-uks-most-over-budget-construction-projects/
[3]https://en.wikipedia.org/wiki/Chain_(real_estate)
[4]https://www.openaccessgovernment.org/uk-house-prices-are-65-times-higher-today-970/138813/
[5]https://www.consultancy.uk/news/30077/uk-consumers-embracing-more-sustainable-behaviour
[6]https://www.constructionenquirer.com/2022/06/06/factory-made-homes-cut-carbon-emissions-by-45/
[7] Less energy than conventional methods

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