MSP Capital

Skyrocketing build costs set to hasten growth of modular housing



More homes will likely be constructed off-site as investors and developers seek to balance spiralling costs with net zero ambitions, forecasts Lee Merrifield, underwriting and credit manager at MSP Capital (pictured above).


The specialist lender predicts a growing role for modular assembly methods as a cheaper, greener alternative to on-site construction.

“We are in an economic climate with inflation hitting a 40-year high and the price of construction materials skyrocketing — this is due to supply chain impacts caused by the war in Ukraine, sanctions against Russia, the lingering impact of the pandemic, and Brexit. 

“At the same time, investors, prospective housing occupants and the government are all demanding that homes are built with environmental sustainability in mind because of the climate emergency.

“This combination of factors has created a perfect opportunity to look in more detail at modular, energy-efficient approaches to housebuilding. 

“If developers can shorten the build period and deliver an environmentally friendly product with low energy costs, then individual projects will be more attractive to both investors and customers.

“More widely, the sector as a whole can play its part in not only meeting government energy efficiency standards, but in demonstrating genuine innovation on the path to net zero.”



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