A major Chinese building materials company has revealed a plan to build six prefabricated home factories in the UK that will produce 25,000 low-energy dwellings a year. The deal will help the UK to tackle its growing housing crisis which has come about following decades of undersupply and a fast-rising population.
Soaring housing costs in the UK have created and a rising interest in prefabricated housing techniques and a build-to-rent business model.
According to Global Construction Review, China National Building Material Company (CNBM) has agreed to 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 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 earlier this week.
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 1m 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.
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.”
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.