Once seen as a niche sector, MMC is now being taken more seriously as a solution to some of the UK’s biggest housing headaches.
With the Labour government aiming to deliver 1.5 million homes this term, and new safety rules pushing for better quality, the pressure on the housing market is growing. Add to that an ageing workforce and a growing skills gap, and it’s clear the industry needs fresh thinking.
Updated legal definitions and frameworks
The definition of MMC has matured and now encompasses seven distinct categories developed by a subcommittee of the Ministry of Housing, Communities and Local Government, led by Mark Farmer of Cast Consultancy.
This framework recognises varying levels of modularity and construction techniques, helping stakeholders better understand and apply MMC across their projects.
Legal frameworks have also adapted to support MMC’s unique procurement and manufacturing processes.
While more traditional construction legal principles are not adequate for a number of issues that arise with MMC builds, lawyers have worked to redefine the status quo in structuring contracts for modular delivery and establish a common approach to these issues.
Despite this progress, there remains a need for a MMC-specific form of contract. As a result of its approach to integration of a multiparty structure with a shared objective party, the Framework Alliance Contract (FAC-1) has become a popular tool for collaborative procurement. It allows early engagement with manufacturers and ensures compliance with public procurement procedures.
Additionally, pre-construction services agreements (PSCAs) are increasingly used to structure contracts around modular methods, and can help to address early design freezes.
The Construction Leadership Council and other industry bodies continue to advocate for collaborative approaches, such as the FAC-1 contract and cooperative deeds, to ensure MMC can thrive in a complex and evolving regulatory environment.
However, securing large upfront payments and negotiating vesting certificates and performance bonds remain hurdles, especially for SMEs.
Legal innovations such as participation and cooperation deeds are being explored to manage insolvency risks and ensure continuity in modular production, particularly when multiple clients are involved.
Design guidance and quality assurance
One of the major criticisms of MMC in the past has been the perceived lack of quality compared to traditional construction.
While the volume of MMC-built homes remains low, limiting economies of scale, technological advancements have significantly improved quality standards. Factories like those operated by Vistry Works, the manufacturing arm of Vistry Group, are now capable of delivering high-quality homes economically and at scale.
In April 2025, the British Standards Institution introduced PAS 8700, a landmark publication that outlines requirements for Design for Manufacture and Assembly (DfMA) and MMC in residential buildings. This guidance promotes early engagement at RIBA Stage 1, clarifies design responsibilities, and introduces the role of the MMC adviser, who liaises with system manufacturers to ensure compatibility and availability.
PAS 8700 also emphasises standardisation, encouraging common room layouts and modular systems that can be replicated across projects. This not only improves efficiency, but it also facilitates learning and innovation within the factories.
Furthermore, the NHBC Accepts scheme, launched in 2020, provides fast-track warranty approvals and includes factory inspections, reinforcing quality assurance throughout the construction process.
Helping to solve the skills shortage
The UK construction industry continues to grapple with a shrinking workforce, exacerbated by Brexit and changes to immigration rules, an ageing demographic, and difficulty in recruiting younger employees.
The Construction Industry Training Board forecasts that nearly 48,000 new workers will be needed each year between 2025 and 2029 to meet demand.
MMC offers a compelling solution. Factory-based construction provides a more stable and attractive working environment compared with traditional site-based roles. It appeals to a broader talent pool, including individuals from manufacturing backgrounds, ex-offenders, and armed forces veterans, aligning with government goals to promote home-grown recruitment.
Moreover, consistent demand for MMC can support training and apprenticeship programmes, creating a sustainable pipeline of skilled workers.
By shifting the focus from traditional trades to factory-based roles, MMC can help alleviate the skills shortage while being at the cutting edge of modernising the industry.
Government investment and policy momentum
Labour’s commitment to building 1.5 million homes during its term, coupled with a £39 billion investment in affordable housing announced in the March 2025 Spending Review, provides a strong impetus to housing policy. While MMC messaging from the government is limited, it hasn’t been ignored.
This investment not only keeps housing delivery in the spotlight – it also creates opportunities for MMC to scale. The government’s backing provides confidence to developers and manufacturers, encouraging innovation and long-term planning.
Additionally, recent changes to immigration policy may restrict access to foreign labour, further highlighting the need for MMC as a domestic solution to workforce challenges.
Temporary housing solutions
Beyond permanent housing, MMC is increasingly being considered for temporary accommodation, addressing the urgent need to reduce reliance on hotels and hostels for displaced families.
Modular units can be rapidly deployed, offering high-quality, energy-efficient living spaces that meet safety and design standards.
Trowers & Hamlins is currently advising on a project with Havering Council and Wates, exploring how MMC can be used to provide temporary housing. These initiatives demonstrate the flexibility of MMC and its potential to respond to short-term housing crises while providing long-term value.
Factory-built units can be designed for easy relocation, quick assembly, and minimal disruption, making them ideal for emergency housing or transitional accommodation.
With robust legal and quality assurance frameworks now in place, MMC is well-positioned to support both permanent and temporary housing needs.
MMC is a necessity. With housing demand surging, there is a clear need to supplement traditional methods of house building.
Precision-manufactured homes offer speed, quality and sustainability. But to truly unlock their potential, the government and industry must move beyond pilot projects and embrace scale.
The future of housing is factory-built, and the time to invest is now.
Rachael Hobbis is a partner in projects and construction, and Nick Fearon is a trainee solicitor in projects and construction, at Trowers & Hamlins.
