20 LEGAL AWARDS 2019 | WWW.LAWYER-MONTHLY.COM Trowers & Hamlins LLP United Kingdom Construction” something else? All I have come up with so far is “Post Modern Methods of Construction”, but I am open to suggestions. To what extent has the UK embraced (Post) Modern Methods of Construction? Most construction projects today in the UK will contain some degree of off-site manufacturing however it is still considered to be a small part of the entire industry. In 2018 the Royal Institution of Chartered Surveyors (RICS) put the number of modular homes built in the UK each year at 15,000 and the total market value of off-site manufacturing at some 7% of the total construction sector. Recently there has definitely been a push towards using Modern Methods of Construction perhaps initiated by the Farmer report and the government certianly has made available grants to schemes employing such methods. Some of the industry’s leading names are now establishing factories to produce modules for use on their projects. Some 30 years after designing pods as an architectural student I am now drafting building contracts for the use of bathroom pods in super prime residential developments in the most exclusive parts of London. However these methods of construction have been around since long before Mark Farmer’s report but the wide spread off-site manufacturer of pods or modules has never really caught on in the UK. If you are a factory producing bathroom or kitchen pods or indeed entire modular houses you face a particular set of commercial difficulties: • On a traditional construction project a contractor usually gets paid on a monthly basis for the work he does on site that month. A factory with an order for say 1,000 modules is unlikely to be getting paid on a monthly basis for the work they do to the modules in any one month. It is far more likely that the purchaser of the modules may have paid some deposit up front but will not be parting with the full cost of the modules until they are complete and have all been delivered to site. This means the manufacturer is really funding the entire production itself right up until completion of the order. It is usually only the very large manufacturing enterprises that can really afford to do that. • If the purchaser of the modules goes out of business before the order is complete that entire order for 1,000 modules is abortive and the manufacturer is left picking up the entire cost itself (less any deposit). That kind of cost can be enough to sink a manufacturing business. • A factory producing motor cars can sell those motor cars all around the world. If one order for cars does not work out as planned then there are likely to be other potential purchasers of those same motor cars in other parts of the world. The situation is very different for manufacturers of modular housing units. Those modules are usually bespoke to a particular project and in the event of problems cannot be simply transferred and used on another project for another customer. • History has shown that the house building market in the UK is cyclical. During the downturn a traditional house builder (who sub-contracts outmost of hiswork) cansimplyslowdownor stopbuilding. Bycontrast a manufacturer of modular pods needs to keep his factories going and usually cannot adjust to a cyclical industry in the way that a traditional house builder can. Securing a long term pipeline of orders is a real problem in the construction manufacturing industry. “ “ You have to give this much to the Luftwaffe: when it knocked down our buildings it did not replace them with anything more offensive than rubble. We did that. HRH Charles, Prince of Wales. Cathederal Tower Side Elevation
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