To see an industry transformation, we all need to pull together – including developers
Kit Malthouse, the newly appointed housing minister following last Monday’s dramatic reshuffle, begins his new job this week. Although he is a fresh face, he must tackle the same fundamental problem that faced each of his immediate predecessors: how to get the UK building more good-quality homes.
There is a pressing need for more housing, yet successive governments have struggled to keep up with this demand, especially when faced with the cold, hard reality of actual housebuilding numbers. Developers and housing associations are building more homes, yes, but many more are needed.
There are plenty of reasons why we as a country are not building enough new houses including a convoluted planning system, poor construction productivity levels, a reluctance in some parts to increase output, risk aversion from developers and financiers and not enough sites being available or made available. If we must find a way to meet these challenges, everyone can benefit.
According to analysis in Mace’s recent report, City Living: How modern methods of construction can deliver the homes Britain needs, 10,500 homes need to be built in British cities every month of every year for the next 20 years in order to meet demand. That means that one in six of the city homes that are needed are yet to be built. This demand cannot be met unless innovations and new ways of delivering are embraced.
In order to meet demand for new homes in our cities, the construction industry needs to increase its productivity by 30%. This can only happen if our clients are willing to innovate and yes, sometimes, will take a risk to advance our industry.
Last night, Mace was thrilled to take home a 🏆 in the 'Infrastructure and Construction' category at the first ever @EstatesGazette Tech Awards, for our 'Jumping Factories'. Congratulations to all the finalists. #constructioninnovation #EGTechAwards18 pic.twitter.com/ACFhrEU458
— Mace (@MaceGroup) July 11, 2018
The collapse of Carillion laid bare some of the ingrained flaws within the sector. With 15% of materials delivered to traditional construction projects ending up in skips, 20% being added to the final cost due to defects snags and quality problems, and 70% of projects delivered in London being late, sticking with the status quo is not sustainable in the long term.
As Einstein famously said, “insanity is doing the same thing over and over again and expecting different results”.
Our work with Delancey and Qatari Diar at East Village in Stratford, E20, has led to us being able to complete a floor – including structure, cladding, bathrooms and utility cupboards – in just one week. Reducing lorry movements by 40% with 75% less waste. And instead of using large factories dotted around the country, we work with our local supply chain in a similar way to how the automotive sector assembles cars which boosts regional growth.
Tech titans crowned at EG’s first tech awards
If we can use new innovative approaches like this we can eradicate the UK’s new homes shortfall which would add £53bn to the UK’s economic output over the next 20 years, improve quality, speed of delivery, safety and predictability.
If a significant enough pipeline of work is created, significant costs benefits should also be seen as economies of scale come into play.
The only way that those economies of scale and a dramatic industry transformation will be seen is if there are enough forward-thinking clients and financiers who are willing to look differently at how buildings are delivered and in return will reap the benefits.
There are already a growing number of pioneers out there, but we need far more.
Responsibility for building the homes we need falls at the feet of many different organisations. We at Mace are determined to play our part by investing more than £300m in R&D and working with clients who share our ambitions to disrupt the industry.
We hope other construction companies will follow our lead and clients will embrace a brave new world where MMC becomes the norm and improves the way we build the homes that people want to live in.
Mark Reynolds is chief executive of Mace.
