A new plan hatched by China National Building Material Company to make 25,000 British homes a year, in factories, may do to the UK housing market what Henry Ford did to the car industry.
It is perhaps the most famous of all business quotes: and surely the thing Henry Ford is most famous for saying: “You can have any colour you like, as long as it is black.” It sums up the principle of assembly line production: mass production led to the cost of producing goods crashing: it opened up the car industry to the mass market.
Maybe the equivalent saying circa 2022, will be “you can have any colour home you like, as long as it is prefabricated.”
China National Building Material Company is clubbing together with Your Housing Group – a leading UK housing association to make houses in factories. The joint venture builds upon technology developed by Barcelona Housing Systems, and will entail the creation of six factories across the UK, employing around 1,000 people. Renewable energy supplier, Welink is also involved in the project.
The plan is that by 2022, the factories will be building 25,000 homes a year, with 2,000 homes scheduled for next year.
Peng Shou, the chairman of China National Building Material Company 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.”
Ajmal Rahman, chairman of Welink Group said: "The UK’s housing shortfall is only going to be addressed by radical innovation in building practices which opens the way for modular housing,”
The homes will be super energy efficient, and be charged at least partially by solar power. It is planned that 75 per cent of the energy used by each home will be off-grid.
The UK government has targeted building one million new homes by 2020, clearly this project will barely touch the surface. But the point is that this is just the beginning. Legal and General is also in this market place, with plans afoot to build 4,500 flats a year.
Studies show that the UK housing market is currently haunted by a problem of low demand and low supply – recent surveys from the Residential Market Survey from RICS, demonstrates this.
Part of the problem is planning permission holding back construction. But there are bottle necks among constructors. For one thing, many constructors are unable to raise the finance they need to create new houses, for another, even if they can raise the money, there is a shortage of skilled labour.
But if we make our houses in factories, then the UK’s ability to make new homes could be transformed. If one company plans to make 25,000 homes a year by 2022, imagine what could happen if several companies enter the business and by, say, 2025.
But look at it another way. 25,000 homes from 1,000 workers does not seem supportive of the jobs market.
This could be yet another example of how new technologies can lead to more production from less jobs.