The Welsh Government wants councils to build far more council homes at scale and at pace, however, they face the well-documented capacity constraints faced by traditional house builders.
To deliver more homes quickly, councils will be encouraged to use modern methods of construction (MMC), which will help them build better quality homes faster than traditional methods allow, in order to meet the growing need for affordable housing across the country.
MMC includes various construction methods from new materials and technologies, to off-site manufacturing, which either replace or complement traditional methods of construction.
MMC opportunities will also bring significant new benefits to the Welsh economy.
To back Welsh business, Ministers plan to help this next generation of homes to be built utilising national assets such as Welsh steel and Welsh timber.
There will also be a focus on using the emerging MMC industry in Wales to pursue Welsh social and ethical ambitions, including developing skills and market-leading technical expertise in communities hardest hit by the decline of traditional industries. Investment will also help firms invest in locally sourced labour.
According to the government, other benefits include:
creating new jobs and developing the new skills required to accommodate greater use of MMC, which will represent a sea-change in the construction industry
upskilling the existing construction workforce
attracting new and diverse entrants from marginalised groups such as offenders and those who wouldn’t necessarily consider careers in traditional construction such as women
As part of the Welsh Government’s new Modern Methods of Construction strategy ‘Reimagining social house building in Wales’ Ministers are making a major £45 million investment in the modular housing industry in Wales, to ensure it can deliver the next generation of social housing that people need.
£20 million is being made available for MMC businesses, who in partnership with Welsh social landlords, want to build the next generation of social housing.
This investment is designed to help and encourage the market, especially SMEs, to develop off-site manufacture (OSM) solutions such as supply chains, factories, skills development centres, that meet the needs of the next generation of social housing in Wales.
A further £25 million is being made available for round four of the Welsh Government’s Innovative Housing Programme, which will focus on innovative housing delivered through MMC.
The strategy supports the Welsh Government’s ambitions to reduce carbon emissions from the housing sector. It also supports move to a circular economy, as building with MMC could reduce construction waste by as much as 70-90%.
Housing Minister, Julie James said: "Building more social and affordable homes is a key priority for the Welsh Government. Over the last four years, this Welsh Government has invested £2 billion in new housing across Wales, as part of our ambition to deliver 20,000 affordable homes by 2021.
"But we want to build more. And we want to build better. The significant investment we’re making in the modular housing industry will enable us to do that.
"Gone are the days of MMC’s association with poor quality, temporary, pre-fabricated housing; MMC now produces high quality, desirable and energy efficient affordable homes that tenants can be proud of. We have certainly moved from Pre-Fab to Ab-Fab!
"Developing the MMC industry in Wales presents us with a great opportunity to not only build beautiful new social housing, but also kick-start a new industry that will become increasingly important for our economy.
"The publication of the strategy is in response to a recommendation made by the Welsh Government’s Affordable Housing Supply Review, which identified Modern Methods of Construction as a way of more quickly increasing housing supply."