The Ecology Building Society were the first UK lender to launch dedicated mortgages for offsite construction. Dan Capstick, its Mortgage Product Manager, outlines recent developments of this still unique position.
Having taken a fresh look at how we could offer mortgages for homes built by this method, our aim was to address several challenges. We wanted to create a better customer experience for offsite construction borrowers and join up the finance with the build by unlocking stage payments in a simpler way. We also wanted to offer more support to this sector of the construction industry, doing what we can to increase public awareness of the methods and benefits of offsite, whether modules are 2D or 3D.
Offsite construction accounts for more than half of all self-build homes, according to the latest figures from NaCSBA, the National Custom & Self Build Association. Ecology is keen for this sector to grow and create more product choice for consumers. We believe the pace of this growth will speed up as the number of high-quality suppliers increases and this type of construction becomes better known and more widely used.
And finally, as a lender with four decades’ experience in self-build mortgages, we were interested in ways to appeal to new and different types of borrowers, including those who might struggle with the larger upfront costs for this type of development.
On the first anniversary of the product launch, our priority this year is to add to our growing pool of partner suppliers, teaming up with more businesses which use different methods and materials. This partnership approach is also unique within our sector, and we want to do as much as we can to showcase offsite construction’s technology and innovation.
We’d love to see wider use of modular construction more generally – for example by traditional builders, including large-scale developers, who still tend to favour traditional building techniques and materials. As well as ensuring more consistent build standards, using offsite construction could help developers to cut the carbon footprint of the build process, as well as reducing site waste and saving them money.
Modern industry accreditations should give consumers added confidence in the high quality of what can be built now. That’s why we need more advocates and great examples of offsite construction. These homes tend to achieve the highest energy efficiency levels, even better than the high levels among self-build homes in general. We’ve seen this with the offsite construction homes Ecology has lent on, thanks to the greater accuracy and precision of construction made possible by a modular build.
As a green lender, improving energy efficiency standards is something Ecology wants to see across the UK’s housing stock, which is the oldest and most draughty in Europe. That’s why we use our rates to reward our borrowers for reducing the environmental impact of their homes through our C-Change discount. When it comes to newbuild, we believe offsite construction can help to deliver better quality, warmer homes, which will save their owners money on their bills as well as creating lower carbon emissions than traditionally constructed properties. In addition, we see speed of construction as a particular strength at a time when the UK is struggling with a massive shortfall in housing supply, across all tenures.
Where there is an urgent need for homes combined with stringent cost pressures, such as in the social housing sector, we believe offsite construction could be hugely beneficial in delivering good quality, energy efficient and affordable homes at scale across the country.
Housing need and the costs of buying and renting are key concerns for all age groups as battle lines are drawn for the forthcoming General Election. We hope the next Government will show more imagination in ways to speed up the construction of good-quality new homes and look more closely about how offsite construction can help to deliver this. For more information visit: www.ecology.co.uk
Source: Offsite magazine issue 41
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