The first modular home prototype factory built by insurer Legal & General (L&G) will roll off the production line this summer, as it starts its bid to build 3,000 homes a year for rent.
L&G announced it was going into construction to produce new homes in February.
“We are building a box in a factory,” explained L&G Homes head of business development Rob Hall at the Mott MacDonald and Build Offsite Next Generation Infrastructure event.
The basic construction incorporates the use of cross laminated timber as the core building material, which Hall said provided the long-term thermal, structural and acoustic performance L&G required. The aim is for high quality, fault free, low maintenance property that will give a strong return on investment.
The company has taken control of a new 550,000sq ft factory near Leeds to build the new homes fully completed in the factory, including fixtures and finishes. Modules will be transported to site to be erected on prebuilt foundations with all infrastructure completed.
The buildings can be finished with render, brick or any alternative proprietary cladding system. “If a unit arrives on site first thing in the morning, the tenant could have keys to their home by 6pm, if a proprietary system is being used,” said Hall. “If we have gone for the brick finish, it will be longer but could be completed within 14 days depending on the type and size of the home.
“Typically the homes will be 70% more efficient than traditional house building techniques and delivered 70% quicker.”
L&G is partnering Dutch pension fund manager PGGM in investing in the residential rental market. The initial aim is to invest £600M with assets already secured in Bristol, Salford and Walthamstow in northeast London, where the plan is to construct more than 400 apartments.
Funding institutions have not played a part in the UK rental market for almost 70 years but a housing requirement of 250,000 homes a year is making the sector attractive for funds whose investment should yield 3 to 5%. “There is £30bn to £80bn trying to access the sector at the moment,” said L&G fund manager Dan Batterton. “This sector is going to be significant and L&G’s long-term target is to construct more than 1,000 homes a year.”
“Traditional housebuilders are happy if they sell an apartment a week. In the rental market, you can rent an apartment per day. So speed of delivery is important. We think modular homes will be a hugely important part of the build to rent sector as it expands,” Batterton said.