Key housing leaders have agreed a key step toward insuring and mortgaging new homes built using Modern Methods of Construction (MMC), Housing Minister Christopher Pincher has announced.
Warranty providers have signed a Memorandum of Understanding, agreeing to take “meaningful steps” to having a shared minimum standard for assessing homes built using MMC, which is thought will help open up mortgage and insurance products for MMC homes.
Once a shared minimum standard is introduced, lenders and insurers will have assurance of the quality and durability of MMC homes.
MMC is a relatively new housebuilding technique in which homes can be manufactured offsite and assembled onsite, boosting an industry that allows homes to be built in days instead of months.
Industry research suggests these homes can have up to 80% fewer defects and have the potential to reduce heating bills by up to 70%.
“An important milestone”
In his announcement, Housing Minister Christopher Pincher said: “Building green, well-designed homes is at the heart of this government’s mission to support people in every part of the country.
“We’re bringing together the talents of our manufacturing and financial industries to back new technologies that could see us leading the world in the design of high-quality, low-carbon homes with the mortgage and insurance products needed to support them.”
Mark Farmer, MMC Working Group chair and government MMC Champion, said: “This MoU is an important milestone in improving underwriting confidence in modern methods of construction.
“Greater collaboration and transparency in technical assessment and validation across the market will ensure we have consistency of approach and can drive a more unified quality and standards-led approach to innovation.
Steve Wood, chief executive of NHBC (National House Building Council), said: “NHBC welcomes all steps that contribute to improving the construction quality of new homes.
“We are wholly committed to building confidence in MMC and believe that it has an important role in helping the industry and government to deliver safe, sustainable places to live over the long-term.”
Liam Devaney for Premier Guarantee said: “Premier Guarantee believe Modern Methods of Construction can offer developers great benefits in terms of speed and quality.
“This Memorandum of Understanding is an important step to ensure the industry is consistent in their assessment of new systems, reassuring lenders and helping Modern Methods of Construction realise their potential.”
Jeff Maxted, director of Technical Consultancy for BLP Insurance, said: “BLP is confident that the MOU (Memorandum of Understanding) we have signed with NHBC and MDIS will result in a sharing of knowledge between warranty providers and increase industry and consumer confidence in the quality and durability of new homes built using MMC.”
Sarah Sheppard for LABC Warranty said: “LABC Warranty are pleased to be involved in the raising of standards within the MMC market through this collaboration.
“The innovation team have been working hard with the industry to ensure that our approval process is thorough to enable end users to have confidence in newer innovative products.”
More support for MMC
Builders of MMC homes need to be able to secure a warranty, protecting buyers of new homes from the costs of possible defects.
Warranty providers currently use different standards for their assessment of homes, making it difficult to know what these homes have been tested for.
Setting new standards is a common issue for new, innovative products like MMC homes, but today’s announcement has been widely seen as an important step toward standardising warranty providers’ assessments.
The announcement builds on recent government support for MMC, including:
- Delivering more than £272m of loans for projects using MMC from the government’s Home Building Fund
- Launching a definition and categorisation for all MMC, agreed with industry, helping make progress such as today’s announcement possible
The parties involved in the MoU are the NHBC, BLP, and MDWIS (on behalf of Premier Guarantee and LABC Warranty).
The MMC Working Group includes representatives of Buildoffsite, Homes England, the National Home Building Council and the Royal Institute of Chartered Surveyors.