A major Chinese building materials company has become the latest player to tackle the UK housing crisis with an unprecedented plan to build six prefabricated home factories that will pump out 25,000 low-energy dwellings a year.
China National Building Material Company (CNBM) will bring its industrial might to bear in a £2.75bn joint venture with a leading UK housing association, Your Housing Group (YHG), and a renewable energy supplier, Welink, to meet pent up demand in the UK for affordable rented housing, in a deal praised by the UK’s Department for International Trade.
Spanish home manufacturer, Barcelona Housing Systems, is supplying the technology.
The key to unlocking the opportunities is through an industrialisation strategy at significant scale– Peng Shou, China National Building Material Company
The six planned factories will use British light gauge steel framing to produce panelised components for residential developments that are "at least 75% off-grid" thanks to solar power and energy efficient design, renewables developer Welink said in announcing the joint venture today (19 December).
More than a thousand people will be employed in the factories, yet to be sited, which will produce 25,000 homes a year by 2022, according to the announcement.
State-owned CNBM will invest £2.5bn in the venture, and housing association YHG will supply £250m, reports magazine Inside Housing.
The UK government greeted the news enthusiastically, as it tries to lure innovative entrants to the UK housing market to help it deliver its objective of 1 million new homes by 2020.
"This is a clear endorsement of the UK’s attractiveness as a place for inward investment. This announcement has the potential to benefit local communities across the country, creating jobs, boosting local economies and creating homes," said International Trade Minister, Greg Hands.
CNBM’s chairman Peng Shou said "the key to unlocking the opportunities to address the housing needs of the UK is through the development and delivery of an industrialisation strategy at significant scale".
The joint venture hopes to start putting up its prefabricated homes before the factories are built.
Five pilot schemes are planned to deliver 2,000 homes next year, with the panels for these homes supplied by Barcelona Housing Systems, a Spanish manufacturer, Inside Housing reports.
Signing the deal, from left: Ajmal Rahman, chairman of Welink Group; Mark Tattersall, chairman of Your Housing Group; CNBM chairman Peng Shou; Cesar Martinell, chairman of Barcelona Housing Systems and Technology Director at Welink Group (Welink)
The first scheme, in Liverpool, is expected to receive planning permission in January.
Eventually the joint venture hopes to do deals with other local authorities and housing associations. It says such partnerships will develop local supply and delivery chains.
"Our partnership comes at a time when the UK’s housing shortfall is only going to be addressed by radical innovation in building practices which opens the way for modular housing," said Ajmal Rahman, chairman of Welink Group.
He added: "This joint venture will give a significant kick-start to delivering the new homes people need across the UK which includes helping to address fuel poverty issues through our incorporated solar and energy efficient design – meaning our developments can be at least 75% off-grid. Furthermore, British produced light gauge steel framing will help keep our carbon footprint to a minimum."
Decades of undersupply and a fast-rising population in the UK have led to soaring housing costs and a sudden interest in prefabricated housing techniques and a build-to-rent business model, which has to date been a small component of the housing market.
The trend has seen some unexpected entrants, starting in February this year when financial services giant Legal & General said it would build the largest home-building factory in Europe in a bid to shake up UK housing by manufacturing up to 4,500 flats per year.
CNBM’s joint venture with YHG, Welink and Barcelona Housing Systems is an even more ambitious plan, and may make traditional housebuilders uneasy.
Top image: Render of Welink’s modular housing research and development centre, called Innovation House, under construction at Berkeley, Gloucestershire (Welink)