28th November 2019

Brexit and Help to Buy: a brake on offsite?

Neil Thomas, Director of Housing, reflects on some of the opinions aired at the recent H+H sponsored Housing Market Intelligence conference.

As the UK housebuilding industry braces itself for a weaker economy and the unknowns of Brexit, it also faces the capping of Help to Buy in 2021 and the end of the scheme in 2023

Writing in the recently published H+H sponsored Housing Market Intelligence report, Richard Donnell, research and insight director at Zoopla, suggests that without a replacement to the scheme he estimates that housing starts could fall by as much as 15-20%. 

With these challenges imminent, it is a challenging environment for major housebuilders to commit to investment in manufacturing facilities for Modern Methods of Construction (MMC), such as off-site

factories for the manufacture of off-site homes are no different from factories that manufacture aircrete products - they run most efficiently when they have a steady demand. 

In a sluggish housing market, housebuilders will only build homes at the rate they can sell them. If sales are slow then the build-rate will be deliberately slow too. It's not a scenario that favours investment in new facilities.

The House of Commons housing select committee is aware that without a critical mass, housebuilders will be reluctant to make the leap to off-site

To help drive up demand, in July it recommended that the Government should consider setting requirements for homebuilding developments that benefit from public funds - such as those sold through Help to Buy Schemes - to incorporate the use of Modern Methods of Construction (MMC) techniques to aggregate demand for MMC products and bolster domestic supply chains. 

With the death of Help to Buy, this suggestion to help grow MMC solutions is dead too. In fact it is deader than dead because it was also rejected by the Government in its subsequent response to the housing committee's report. 

So how can housebuilders enjoy the benefits of MMC, such as fast build-time and a more robust product in a 'challenging' housing market? One solution would be to use an established solution such as H+H's Celcon Elements and I-House System.