Legal and general modular homes factory

L&G's modular business designs houses that emit 93% less carbon than a typical home. Credit: LGMH

Companies

L&G plans 1,000 prefab homes in new joint venture

Legal & General Modular Homes has teamed up with affordable housing provider Vivid to deliver up to 300 net zero carbon homes per year in the UK.

Planning to complete the JV’s first homes in 2023, LGMH said the partnership is part of its ambition to deliver “several thousand” modular homes per year.

LGMH, which has a modular factory outside the city of Leeds, will target a net zero regulated carbon rating for each of the homes it plans to deliver by using thermally efficient materials, air source heat pumps and solar panels.

The company said that its net zero regulated carbon homes are 73% cheaper to run and emit 93% less carbon over the course of a year than a typical home.

Meanwhile, using modular construction is part of a wider industry effort to create new skilled jobs in the sector and improve productivity.

Although the hope is to revolutionise the sector, modular construction has also proved to be a tricky business model for developers, partly due to high upfront costs. Launched in 2016, LGMH reported its first revenue in 2021, a year in which it still recorded £36.9m in pre-tax losses. The business received a £34.8m cash injection from its parent company to help it execute its strategy.

The announcement with Vivid came after LGMH was selected by the City of Wolverhampton as preferred partner for the development of around 400 homes in the city.

Rosie Toogood, CEO of LGMH, said: “Our partnership brings together two like-minded organisations with shared values and objectives to deliver much-needed high quality affordable homes that will make customers feel safe, comfortable, and enjoy where they live.”

For Vivid, the deal comes two years after creating a joint venture with modular developer BoKlok UK – owned by Skanska and IKEA – to similarly develop 300 new modular homes per year across the south east of England.

Commenting on the partnership with LGMH, Mark Perry, CEO of VIVID, said: “We are both committed to providing new homes to address the housing shortage and in particular for us where that helps meet our affordable housing ambitions. Their focus on building energy efficient and sustainable homes has to be right given the cost of living and energy crisis people are facing.”

Ilke raises £100m

This week, another modular housebuilder, Ilke Homes, secured £100m of funding in a round led by affiliates of Fortress Investment Group.

The company called the funding “transformational”, saying that it will help it scale up operations with a new factory and increase its capacity to 4,000 homes per year.

Ilke will also use proceeds from the round to automate more of its processes.

Giles Carter, CEO of Ilke Homes, said: “Our latest fundraise demonstrates that the private sector is increasingly recognising the investment case for change.

“With the race to net zero well and truly underway, the next few years will be a decisive time in the history of housebuilding, so it’s important that true market disruptors are empowered to play a leading role.”

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