House of the future

Zurich has come up with some fascinating ideas in its 'house of the future'. Modular houses, for instance, which may be flexible - add or subtract rooms as required.

It would be interesting to see how the planning system adapted to that idea though. I rather fear people would find that once it came to getting planning permission, the modular idea would suddenly become inflexible.

In fact, as someone working quite a lot of my time in the IT world, I find reusability and modularity seem very natural approaches to use. They simply haven't been applied much in modern housing.

Now I'd like to go a step beyond what Zurich is saying and see how modularity might change the way housebuilders have to compete. Currently, the big part of being a property developer is acquiring sites. Land bank issues are probably ninety percent of the USP for a developer - frankly the quality of the building that results is not what makes the business work. It just has to be good enough (satisficing, not maximising, to use the economics jargon).

With modularity, though, householders could become their own developers. Purchasing a plot would enable you easily to add a module. The really crucial gap in the market now becomes the module factory - the manufacturer rather than the builder.

Who's in this space right now? Very few builders, as far as I can see. A precious few are using modular construction; Redrow has used semi-modular techniques with steel frames to produce affordable housing in the Midlands. The Housing Association sector seems streets ahead - for instance Hyde Housing Association has been using Buma units from Poland for its developments in south London, and Peabody Trust has been very active in using modular techniques. But in the UK most of the manufacturers are still cottage industries, with no real economies of scale. So modular housing doesn't, as yet, come in much cheaper than the built-on-site construction.

The most interesting name in this game is Ikea, which has started producing "flat-pack houses." Now one thing we do know about Ikea is that it has both the production and distribution capability to make this work. And it's also reaching saturation as a retailer, I'd think - I wonder whether someone in head office has set housing out as the new strategic growth direction?