As the UK grapples with a significant housing crisis and escalating demand for affordable homes, could the construction industry be poised for transformation through innovation? Among several emerging trends, industrialised construction may provide part of the solution, capable of enhancing efficiency, reducing costs, and addressing the urgent need for new social housing.
The need for innovation in social housing
The stark reality of the UK housing crisis cannot be overstated. With an estimated shortfall of 6.5 million homes and over 1.3 million individuals on social housing waiting lists, conventional methods of housing construction alone can no longer keep pace with the escalating demand. The impact of policies such as Right to Buy has dramatically reduced the availability of social housing, emphasising the urgent need for innovative solutions that ensure sustainable and affordable homes for all. Plus, the huge skills shortage means that there aren’t enough tradespeople to build all the homes we need using conventional bricks and mortar approaches.
Government funding has increasingly become a focal point in discussions about social housing delivery. The recent announcement of £39 billion for the Social and Affordable Homes Programme (SAHP) aims to accelerate new builds in England, with an ambitious target to deliver 300,000 new social and affordable homes over the next decade. However, funding alone will not suffice; the construction industry must embrace new methodologies to meet these ambitious housing targets. This is where industrialised construction becomes particularly relevant.
Industrialised construction: could it be a game changer?
Industrialised construction is characterised by a standardised approach and is defined by the Construction Leadership Council as: “…the application of standard, repeatable manufacturing and assembly processes to the delivery of building and infrastructure projects.”[1]
There is a similar ethos to other, perhaps more familiar approaches – MMC,[2] offsite construction, modular and Design for Manufacture and Assembly. Industrialised construction often includes some level of offsite manufacture, and it requires a design approach for components and sub-assemblies that are efficiently manufactured, transported and assembled, and easily repeated.
An industrialised approach to the design and manufacture of buildings offers a novel approach to home building that promises numerous benefits. Unlike traditional construction methods that are often labour-intensive and time-consuming, industrialised techniques, where many components are assembled in factory conditions, can accelerate delivery timelines, reportedly by 30-50%. This efficiency is critical if the government is to meet its targets. In addition, houses are relatively simple and standardised buildings, making them well suited to a standardised and repeatable construction process.
It’s important to acknowledge that here have been some high-profile examples of modular housing companies facing challenges, with some going into administration. The economic climate has not been conducive to a sector that requires certainty and a strong demand pipeline. However, there are still indications that the sub-sector is active and expanding from being niche and experimental, to something that could be mainstream.
The government continues to support MMC and offsite, such as with ‘the Digital Kit of Parts’ for low rise housing using MMC by MHCLG, and a standard for MMC in new build residential has been published – PAS8700:2025. This year saw the launch of a dedicated publication – the Industrialised Construction Journal – where industry experts share examples and make the case for the approach. Autodesk recently held its first conference on Industrialised Construction, and the second Industrialised Construction Conference and Exhibition is taking place in London next April.
Collaboration and the future of housing
Transforming the social housing landscape through industrialised construction and associated methods will require a collaborative approach involving various stakeholders, including housing associations, local authorities, and private developers. Partnerships that leverage shared expertise and resources can enhance the effectiveness of MMC initiatives and ensure they are tailored to meet local needs.
The government’s £11.5 billion Affordable Housing Programme mandated that at least 25% of new homes employ modular construction techniques, creating a significant opportunity for housing associations to innovate and deliver more affordable homes. While the Affordable Housing Programme is due to come to an end next year, the SAHP (2026-2036) takes over. The SAHP doesn’t specify the same 25% target for modular, offering housebuilders more flexibility, but it welcomes bids where MMC supports delivery and encourages innovation. Homes England has also championed modular construction. Government continues to see it as part of the solution to the housing crisis.
In addition, by embracing advanced technologies and modern construction practices such as Building Information Modelling (BIM), stakeholders can improve project planning, reduce errors, and ensure that homes meet high standards of efficiency and quality.
Looking forward, the integration of smart technologies in modular homes will further enhance energy efficiency and resident comfort. Intelligent systems for energy management, sustainable building materials, and innovative heating solutions showcase the potential for a new generation of homes that are not only cost-effective but also environmentally responsible.
In summary, while challenges exist within the MMC movement, the future of social housing in the UK hinges on our ability to innovate. Industrialised and offsite construction could present a viable solution to the pressing housing crisis, offering the speed, sustainability, and cost-effectiveness that are essential to meet the growing demand for affordable homes.
You can find out more about the Social Housing New Build market in our latest report here.
Sources:
[1] CLC_IC_Definition-and-Narrative_2025.pdf
[2] Modern Methods of Construction
