Crest Nicholson confirms it is dropping offsite manufacturing target

Crest Nicholson has affirmed reports that new chief executive Peter Truscott is casting aside its target to build 15% of homes using offsite manufacturing.

The firm said in its final results statement that offsite manufacture – which it refers to as OSM – was “some way from being a mature model that we can quickly transition to”, but stopped short of saying it would end its use of the technology, commenting it would work with government on the issue.

However, in a subsequent call with analysts and investors, Truscott said: “Until governments set clear targets in these regulatory areas, it’s very, very difficult to be big participants in this area. We will continue to be up with events, but not ahead of them, until we get a much clearer direction from government in this area.”

A source close to the firm confirmed this meant the target established by previous management – to produce 15% of homes via offsite as by this year – had been dropped. The firm had announced the plan in June 2018, saying it would build 300 offsite homes in 2019 and 450 in 2020.

The firm’s results statement had suggested the prior focus on offsite had led it to lose concentration on efficient production more broadly. It said the “historically narrow view [on offsite] reflects where we have lost pace with our competitors and their ways of working”.

The government has made clear its support for the adoption of offsite and modular building techniques, which it brands modern methods of construction, but has stopped short of setting any target for use of the technology either in publicly-funded homes or for the housebuilding industry more broadly.

Earlier this month, housing minister Esther McVey used a speech at Legal & General’s modular housing factory in Leeds to say she wanted the UK to become “the world-leader in modular homes within the next 10 years”, but did not announce any policy measures to make that happen.

Industry interest in modern methods of construction has risen in recent years, with housebuilders including Countryside and Berkeley Group having set up offsite production facilities. However, Legal & General has struggled to get its facility up and running, with its offsite subsidiary L&G Modular having reported losses of £76m over the past three years.