In a recent evidence session to discuss the capacity of the construction sector, it was revealed that councils share a “negative view” of modern methods of construction (MMC) due to issues around cost and quality
Speaking to the Housing, Communities, and Local Government Committee in Westminster on 4 March 2025, Director of Policy and Public Affairs at the Housing Forum, Anna Clarke said:
“I have just come out of a meeting yesterday looking at councils’ use of MMC and what the barriers were. To be fair, they had a pretty negative view. Almost all the council development people around the table had tried it and were not going to do it again. They said, “We have been bitten. We are not doing that again”.
The oral evidence session was held to discuss the capacity challenges of the construction sector and whether it was equipped to deliver on the government’s pledge to build 1.5 million new homes. Committee member Lee Dillon MP quizzed the panel on the barriers facing MMC, what the government could do to remove them, and the proportion of the 1.5 million new homes target that should be utilising MMC.
Clarke responded: “The problems [the councils] had experienced were around cost—it was coming in more expensive than traditional methods—and quality. Though in theory you can control quality in factories, that was not their experience on the ground. Some of that quality issue was around the interface between the unit and the groundworks, and how it plugs in, effectively. That was problematic for them. Then there were the risks associated with it. Because there have been some quite high-profile firms going bust, everybody is nervous, so that increases the risk of the development. Those are the things that are problematic about it.”
As reported by Inside Housing, housebuilder Berkeley recently shared its plans to sell its modular housing factory in Kent as part of a scaling back move from MMC. In 2023, modular housing firm Ilke Homes entered administration, with Legal & General (L&G) also announcing a halt in the production of new modular homes at its Yorkshire factory.
In January 2025, it was revealed that TopHat also made losses of £85 million across its five companies before ceasing trading in November 2024. At the time, the modular house builder cited factors such as “a sluggish market for modular housing” and “limited consumer demand” among other reasons:
“The challenges facing the volumetric modular housing sector have been significant, with necessary volumes to sustain business not achieved by TopHat or the competitor base generally.”
Sharing an alternative, Clarke told the committee she envisaged a future for “panelised systems rather than modular”, which were “more easy to mix and match”.
She added: "There is possibly more use, not really within this five years but looking longer term, when the new towns programmes are rolling out. If you are building at scale, building a large amount of houses that are quite similar, and you are prepared to be reasonably flexible about them not being too bespoke, so they can have a common pattern, there is a better way forward. That might be the larger-scale future for it, rather than those niche uses.”
Also sharing his thoughts was Mark Reynolds, Co-Chair at Construction Leadership Council, who noted that “standardisation and consistency of volume” were key.
“A part of the industry that is very successful is the curtain walling. It is a system. It comes along panelised, not necessarily for dwelling in single-use homes but high-rise apartments. They have a factory. A factory has 10 lines; 10 lines have a capacity. They have to fill that factory 24/7 in order to be productive and efficient. If the volume goes up and down—and this is what is happening with the volume—you have unutilised people, so you have to have consistency of volume. We need to create a programme where we have consistency of volume. It is no different from any manufacturing,” Reynolds said.
“In terms of targets, we should be looking for a minimum of 50% pre-manufactured value and pushing to 60%. In terms of cost efficiency, time is the biggest opportunity in modularisation of pre-manufactured MMC. Whether it is roof trusses, roof systems, or walling systems, if they can be made off site in a standardised way and brought in more quickly, it will succeed,” he added.
You can watch the full evidence session here.