When is modern, modern? And where does AAC fits in?

Financial incentives

The current government has focused most of its influence so far on incentivising the private sector through its central financial mechanism Help to Buy. Under this scheme buyers can access government loans to help them meet the cost of buying a new build house. Aimed primarily at first time buyers, this scheme has been a major stimulus to the housebuilding industry and it is estimated that around one in three new houses built this year will benefit from the funding. Even with this incentive, however, we are still not building anything near enough new homes to meet demand – a fact which partly explains the very high cost of housing. The principle of Supply and Demand economics suggests that a shortage in supply pushes up the cost of the product.

While very important, the Help to Buy Scheme is not sufficient on its own to have the desired effect and we are a long way short of reaching the Government’s 300,000 homes per year target. Couple this fact with an increasingly challenging labour market and it becomes very clear why Government is looking for new solutions.

Modernising building and diversifying supply

The preferred way forward is both to encourage the use of Modern Methods of Construction (MMC) and to support an increase in the supply of public sector housing, delivered through local councils and housing associations. Money is being made available to finance the building of such properties and, in many cases, this money is dependent upon the use of MMC. However, while enthusing about the need to revolutionise the process of building houses, the Government has been quite slow to define exactly what it means by the term MMC.

Many commentators have assumed that the term refers exclusively to modular construction, with complete homes built in factories and delivered to site on a truck. Proponents argue that manufacturing in this way will reduce the amount of labour needed for the construction process and will necessarily result in an increase in quality, durability and sustainability: all claims that are highly debatable and have yet to be proved.

Defining Modern

Fortunately, common sense has prevailed, and earlier this year the Ministry for Housing, Communities and Local Government (MHCLG) published an MMC Definition Framework, setting out what constitutes MMC.

This pragmatic solution looks at a stepped approach, recognising that any industry takes time to evolve, and defining seven categories of MMC. At one end of the scale, Category One refers to the pre-manufacture of the entire 3D structure and at the other, improvements to site practice and the inclusion of new technology to increase efficiency are also recognised for the innovation and improvement they bring.

This approach provides a significant incentive for improvement, while allowing the housebuilding industry to be in control of its own evolution.

Where AAC fits in

From an AAC perspective, it also ensures that the product innovations introduced over recent years are recognised as part of the solution for current and future housebuilding. We believe that our thin layer mortar system will be defined as a Category 6 MMC in recognition of its time-saving and increased accuracy. Our Celcon storey height AAC Elements should sit comfortably in Category 2, providing an offsite manufactured structural solution.

To a European audience it may come as something of a surprise to find thin layer mortar and aircrete panels being described as Modern Methods, given that both have been widely used across the continent for decades. However, housebuilding in the UK is a conservative industry that has been reluctant to embrace innovation and change – hence the Government intervention.

Supporting credibility

It is not only the housebuilders who are conservative, lenders too are understandably cautious about embracing new methods. The MHCLG is therefore also considering the best way to provide warranties that give certainty of the lifetime performance of the property. When H+H UK developed its whole house system (a solution that includes walls, floors, roofs and insulation) we dedicated considerable resource to obtaining rigorous test data. This allowed the system to achieve certification under the Buildoffsite Property Assurance Scheme (BOPAS), which gives an assurance of a minimum 60-year life.

When considering what warranties should be acceptable, the Government is emphasising the need for testing of the whole building system, not just the constituent components.

The proposals are also anticipating problems that could occur years in the future. With the potential for new patented building methods to appear on the market, homeowners wishing to alter or extend the structure of their home in twenty years’ time may have no way of knowing what loadings are possible or how the structure will respond.

The proposed solution to this issue is to establish a central repository of information with the aim of sharing knowledge, experience and evidence. There are, of course, commercial sensitivities around the collation of this type of information and it will be vital to ensure that it is held on an independently hosted platform with secured access.

We believe that H+H UK is very well-positioned to support the MMC agenda. We have technical solutions that sit comfortably within the new MMC definition with the added reassurance that these solutions are based on a trusted material with well-understood technical performance characteristics.

However, we also believe that the take-up of MMC will be slow and gradual. Despite the range of solutions we provide into the market, our standard AAC blocks remain the overwhelming first choice for housebuilders, who continue to build traditionally because it suits their business model.

A radical change to the structure of housebuilding requires both stable demand and significant investment. With large-scale government incentives now might be the time for MMC to become embedded into the UK housebuilding industry. Time will tell. Either way, we at H+H remain confident that housebuilding volumes will remain strong in the immediate future and that our products and solutions are well positioned to capitalise on that.

H+H UK Limited Celcon House, Ightham, Sevenoaks, Kent TN15 9HZ, UK T +44 1732 886333 info@hhcelcon.co.uk www.hhcelcon.co.uk