In the continuing saga of failed MMC factories in the UK, Ilke Homes said if it does not secure a buyer its order book of new homes “will not be delivered”.
The closure of three big modular factories in Britain, L&G Modular, Urban Splash and now Ilke Homes, could sour the appetite for modular construction for the government agency Homes England, housing associations like Places for People and The Guinness Partnership and private investors.
It’s not that modular construction is at fault in these closures and their aftermath but rather that the modular industry itself hasn’t been diligent in making sure that modular is profitable and efficient.
The news comes weeks after major institutional investor Legal & General announced that it would “cease production” at its giant modular factory, and marks a moment of real crisis for the nascent modular industry in the UK.
It also follows the collapse last year of House by Urban Splash – a joint venture between Manchester developer Urban Splash, Japan’s Sekisui House and Homes England.
Housing association Swan also got into severe financial difficulties last year, partly related to losses from its modular housing business.
In an announcement today, Ilke said a sale would allow the company to deliver its 4,200-home pipeline, blaming “volatile macro-economic conditions and issues with the planning system” that had “complicated fundraising and housing delivery”.
The company’s £1bn order book is predominantly made up of affordable homes, meaning that without a new investor, much-needed housing will not be delivered, the firm said. It said it was pausing operations while a strategic review was ongoing.
Let’s hope this trend of plant closures in the UK doesn’t find its way across the pond as there is already a shortage of housing here and our modular industry is trying hard to fill it.
Gary Fleisher is the Editor in Chief of Modular Home Source and Offsite Builder magazine. Email at [email protected]
Gary Fleisher, the Modcoach
