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Khan should set up an OSM procurement programme – report

Words: Laura Edgar
Offsite manufacturing of housing / iStock-173607372

The Mayor of London is best placed to break down the barriers that prevent wider adoption of offsite manufacturing (OSM) for housing and should set up a London-specific OSM-led procurement framework, says a report.

Designed, Sealed, Delivered: The Contribution of Offsite Manufactured Homes to Solving London’s Housing Crisis states that despite recent improvements in housing output, traditional housebuilders and developers deliver between 50 and 60 per cent of what Mayor Sadiq Khan wants for the city.

The reports says there are a number of reasons why OSM has failed to take off in England, including a lack of guidance, and traditional funding and financing not being geared to the requirements of OSM, which requires greater upfront finance.

As the labour work force ages, the construction sector is facing labour shortages as well as a rising cost of materials. The report notes, however, that the government has started to stimulate the growth of the OSM sector through policy and funding programmes while Khan has expressed support for it through his Affordable Homes Programme and Innovation Fund.

The report makes a number of recommendations that aim to help Khan “galvanise” the sector, including:

  • Providing a clear and strong leadership role in the development and awareness of OSM’s potential, giving consideration to how best promote the sector.
  • Examining all of his policies and guidance to see if there are any policy barriers to the wider adoption of OSM.
  • Working towards defining and adopting a manufactured housing design code to drive a more standardised and aggregated demand profile that can be delivered by a range of technologies and supported by the full range of mayoral strategies, including land and planning.
  • Setting up a London-specific OSM led procurement framework. The key objective would be to attract a sufficient number of developers and contractors capable of delivering housing using a range of OSM-led solutions suitable for a variety of sites.
  • The mayor should look at the potential of using GLA and especially TfL-owned land to stimulate the OSM sector.

Nicky Gavron AM, report author and chair of the London Assembly planning committee, said OSM housing is an “innovative, forward-looking and exciting way” to meet demand.

“These buildings are high quality and outstanding in terms of performance. Their construction is more environmentally friendly than traditional construction methods and they are a far cry from their prefabricated predecessors. Few will disagree that using vacant public land to build homes quickly and with less pollution and disruption could be great news for London, tailored to demands at every price point.

“This is a once-in-a-generation opportunity to work collaboratively with investors, developers and policymakers at a time where experts, central and local government are all calling for the same thing to happen. The mayor is ideally placed to respond to the report’s recommendations and call to action.”


Mark Farmer, chief executive at Cast Consultancy and author of last year’s Farmer Review, which looked at the construction industry, said the report sends an “unequivocal message” to Khan that “now is the time to show strong political leadership to establish a mainstream precision-manufactured housing market in the capital”.

He added that there is an opportunity for the mayor to align with national policy and “the growing cross-party consensus” on the role of OSM as well as tying it to his Skills for Londoners manifesto commitment and the Construction Academy Scheme initiative.

Christy Hayes, CEO at Tide Construction Ltd, an OSM developer, welcomed the report. “The single most important thing needed for companies investing in OSM housing is certainty of demand. If, by becoming a market maker, the mayor can drive continuous growing demand for offsite manufactured homes, we will see significant investment in this sector, which can only be good for everyone.”

Designed, Sealed, Delivered: The Contribution of Offsite Manufactured Homes to Solving London’s Housing Crisis can be found on the London Assembly website (pdf).

Image credit | iStock