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Date: 15 June 2022

Author: Lee Merrifield

The properties we live in will increasingly be constructed off-site, as modular homes, to balance spiralling costs with net zero ambitions.

As the real estate sector addresses record inflation coupled with tighter energy efficiency standards, we predict a growing role for modular assembly methods as a cheaper, greener alternative to on-site construction.

More about modular homes

Modular homes are built in sections, often in climate-controlled indoor facilities, and transported to their ultimate location where they are positioned on pre-set foundations.

They offer cost efficiency advantages from shorter build times and the avoidance of delays caused by on-site weather risks.

We believe these factors will become ever more attractive given the current economic climate. Inflation is hitting a 40-year high and the price of construction materials is skyrocketing because of supply chain impacts caused by the war in Ukraine, sanctions against Russia, the lingering impact of the pandemic, and Brexit.

Modular homes also offer environmental benefits at a time when investors, prospective housing occupants and government are all demanding that homes are built with sustainability in mind because of the climate emergency.

With modular construction, there is the promise of less site waste and scrap, and greater scope for green innovation at the design stage on aspects such as insulation, water use and storage, and lighting and heating.

All this creates a perfect opportunity to look in more detail at modular, energy-efficient approaches to housebuilding.

If developers can shorten the build period and deliver an environmentally friendly product with low energy costs, then individual projects will be more attractive to both investors and customers.

More widely, the sector as a whole can play its part in not only meeting government energy efficiency standards but in demonstrating genuine innovation on the path to net zero.

MSP Capital’s forecast comes as the global market for modular homes is seeing dramatic growth. Industry sources quote annual growth rates of up to seven per cent with market size projected to increase from around £95 billion a year in 2018 to more than £131 billion by 2026. (Source: Allied Market Research)

lee merrifield

With nearly 20 years of property experience, Lee Merrifield, Associate Director of Credit, is ready to assist you

or call Lee on 01202 743400

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