The UK offsite construction industry is in turmoil. Once held up as a beacon of how modular and industrialized building could help solve a growing housing crisis, the sector is now littered with high-profile failures. Jans Offsite Solutions is the most recent casualty, joining a grim list that includes Connect Modular, TopHat, ModPods International, Ilke Homes, Caledonian Modular, Eco Modular Buildings, Mid Group, and even heavyweight investors like L&G and Urban Splash House.
What went wrong? The turbulence was always visible—housing shortages, rising costs, and government pressure to build more, faster. But as Peter Drucker warned, turbulence isn’t the real danger. The danger is trying to navigate these storms using outdated maps and old ways of thinking.
The Illusion of Disruption
At the core of the UK’s offsite failure is a widespread misconception: that introducing automation and building homes in factories would, by itself, solve the housing crisis. That was the promise made to investors, councils, and the public. But many of these companies simply took conventional business strategies and stapled them onto an unconventional method of building.
They relied on large capital injections, centralized production models, and government housing targets to stay afloat—without first transforming the broader housing system that continues to favor on-site, traditional builds. In short, they tried to be disruptive innovators while still obeying yesterday’s rules.
You can’t mass-produce homes when planning departments are stuck in the past. You can’t optimize factory output when local councils approve units one postcode at a time. And you can’t revolutionize construction if your internal leadership still measures success using metrics pulled from site-based spreadsheets.
The turbulence was real. The logic was outdated.
Death by a Thousand Delays
Look no further than TopHat, a company that raised hundreds of millions in funding and boasted celebrity endorsements in housing policy circles. It sank over £50 million in losses by 2023 and shuttered its operations before 2024 ended. What failed wasn’t the idea—it was the execution. TopHat struggled with long planning delays, unclear approval pathways for modular units, and a supply chain that was still more suited to traditional builds than precision manufacturing.
ModPods International suffered a different but equally painful death. The company, which specialized in relocatable modular units, was undone by spiraling relocation costs—a clear sign that logistics in modular construction can’t be treated as an afterthought. These are not plug-and-play solutions. They require precision coordination from design to delivery to install, and even minor misalignments can cascade into budget-breaking problems.
Then there was L&G, the financial giant that poured years of resources into a flagship modular factory, only to abandon ship in 2023 after sustained losses and poor scalability. If even an industry titan can’t make it work, what hope is there for startups without war chests?
The answer is simple: the problem isn’t the factories. It’s the logic being used to run them.
Legacy Thinking in a Factory Setting
Most of these failed ventures brought smart people and smart technology into the offsite space. What they didn’t bring was the mindset shift needed to succeed in a new manufacturing paradigm.
Factory-built housing isn’t traditional construction under a roof. It’s industrialized production that requires lean workflows, integrated digital systems, and end-to-end synchronization between design, compliance, supply chain, and delivery. You can’t plug in a CNC machine and assume it will fix a broken permitting process. You can’t hire a production manager with a site-building background and expect them to think like a manufacturing engineer.
Yet many offsite startups did exactly that. They prioritized volume over systems, marketing over training, and scale over sustainability. They threw money at the problem without first throwing out the obsolete ideas holding back real change.
They brought yesterday’s logic into tomorrow’s opportunity—and it sank them.
A Warning for the Global Industry
This crisis in the UK offsite sector isn’t just a British problem. It’s a cautionary tale for North America, Australia, and any region pinning its hopes on modular construction to fix housing shortfalls. Modular can work—it has worked. But not when it’s forced to follow the same path that broke the old system.
In the U.S., similar early warning signs are already flashing. Venture-backed startups touting grand factory builds have begun to falter. Government pilot programs often take years to break ground due to zoning delays. And traditional construction firms dipping their toes into modular frequently retreat after finding it’s not “profitable enough”—which is another way of saying “we didn’t adapt our systems to make it work.”
Drucker’s wisdom should be printed on the wall of every offsite office and factory floor: It’s not the turbulence. It’s the logic.
What Today’s Logic Looks Like
To rebuild the offsite industry—and truly use it as a tool for affordable housing—leaders need to shed the old skin. Today’s logic is about:
- Integrating policy and process: Cities, developers, and modular firms must co-develop streamlined approval models for offsite units that don’t get stuck in traditional loops.
- Designing for manufacturing: Homes should be engineered for factory efficiency from the ground up—not adapted after the fact.
- Rethinking leadership: Hiring managers with factory-floor efficiency experience, not just site-build expertise.
- Focusing on viability over vanity: Start small, prove a repeatable model, then scale. Hype doesn’t build homes.
- Investing in education: Municipal inspectors, lenders, and permitting officers need to understand what modular is—and what it isn’t.
Until this shift happens, more companies will follow the path of Jans Offsite Solutions and the others. The industry doesn’t lack for need or technology. It lacks the courage to abandon comfortable, familiar thinking.
The collapse of UK modular pioneers isn’t proof that offsite construction doesn’t work—it’s proof that it can’t work under a system designed to support traditional building. As Drucker warned, the greatest danger isn’t change—it’s refusing to change how we think. If we keep dragging old habits into new opportunities, we’ll keep getting the same results: bankruptcies, missed housing targets, and broken promises.
If we want modular construction to be the future, we need to stop thinking like it’s the past.
This article includes references to reporting from Construction News, Housing Today, and Building.co.uk.
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Gary Fleisher, The Modcoach, writes about the modular and offsite construction industry at Modular Home Source.
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