The trouble with factory-built houses is that they look as if they were built in a factory. But off-site manufacture is not incompatible with sophisticated design, as the coming generation of prefab homes will demonstrate.
When George Wimpey, the Guinness Trust and Britspace unveiled a ground-breaking modular house four years ago (top picture), the end result was greeted with gasps of amazement, not because of its technological innovation, but because of its looks. All that effort, invention and investment had produced a bog-standard brick box, devoid of even Tudorbethan light relief.

Since then, that house, like many other innovative housebuilding systems, has failed to find a place in the market, and the UK housebuilding industry is left pondering a conundrum. Apartment schemes developed using off-site manufacturing, whether timber frame, steel or concrete, can be bold and brave in design. But when you build at two storeys, the architecture remains, for the most part, steadfastly conventional. Sometimes it can end up looking even duller than the traditionally built competition.

Wimpey's response to critics of its design four years ago was to insist that buyers expect a house to look like a house. This thought is echoed by James Pickard, director of architect Cartwright Pickard, which has worked on innovative apartment schemes, such the Peabody Trust's celebrated Murray Grove development in north-east London. "The housebuilding industry is sticking to products they think people need," he says.

"It is a supply-led market, not a demand-led one, and the UK housebuyer is not as discerning as they might be."

"Over the last 30-40 years we've had noddy-box architecture, and the planners have wanted to ape past styles, like Victorian," Pickard continues. "Now there is a change and people are looking for more choice. Prefabrication can give the levels of choice required by the customer, whether that is Victorian or contemporary, because it has many different guises."

Other factors have held back design innovation in the factory-built house. "Architects want to do one-offs, they don't see themselves as product designers," says Ben Derbyshire, design director with HTA Architects, which produced the image shown above on the right to illustrate the creative potential of factory-build. "Another difficulty with social housing is that designs get pared down because of costs and that can result in bland facades."

Yet some housing schemes, such as Oakridge Central in Basingstoke, designed by HTA for Sentinel Housing Association, are demonstrating how off-site manufacture can generate richly varied, cost-effective architecture for the two-storey home. More importantly, they are winning the approval of tenants and buyers. At Oakridge Central, HTA has designed a kit of components, including different coloured renders, timber cladding, bricks, balconies and dormer windows that can be attached to the Forge Company's steel frames. The designers had to take into account the views of tenants on what is effectively a regenerated estate, but also tempt buyers into the area. "The residents wanted something that looked traditional," says Derbyshire. "The scheme has pleasability for Joe Public. It meets our objective of being popular without being populist."

Architect Proctor and Matthews has worked from a similar mix-and-match palette of components at London's Greenwich Millennium Village. "We've produced a component-driven architecture, with different elements that can be assembled to deliver a varied townscape and create an individuality of dwellings," says Stephen Proctor. "Prefabrication in the 1960s and 1970s didn't deliver flexibility and adaptability, and that is what we're looking to deliver now. We're talking about breaking down a unit into a set of components."

Off-site manufacture embraces a range of technologies, from volumetric modular – the assembly of complete rooms in the factory – to panel systems such as timber frame, and they do not all offer designers the same flexibility.

John Rivett is group design director with Wates, the contractor that worked on Raines Dairy, another Peabody Trust prefab project in north London, and which has a working group looking at how to tackle the design and transportation issues of modular design. He says: "With modular, there is a joy in bringing to site a unit that is totally finished. You can create some flexibility in design, but you have got to be ingenious about it. Because of planners, modular schemes tend to get pushed towards having traditional brick elevations, when the systems lend themselves to being clad in a boarded system.

"The structure also works best if all the loadbearing walls are above one another, so it is hard to step the elevation because you have to transfer the loads horizontally. But modular units are available from abroad that have heavier steel frames, are more robust and can be staggered easily."

For houses, Rivett favours panelised technology. "You can create virtually anything you like with panelised systems – houses don't have to be square," he says.

"A cold rolled steel system can be used to create any variation of a house. If anything, it works better at two storeys because it offers speed."

Cartwright Pickard is working with a manufacturer on the development of a timber-frame system that should be unveiled later this year. "Modular is ideal for medium-rise apartments, but we think flat-pack timber is more flexible for low-rise family dwellings," says James Pickard.

Housebuilder Sunley Estates has also turned to timber frame, having trialled modular houses. "By our own admission, the two modular homes we built were hardly of dynamic design," says executive chairman James Sunley. "We did find the size and shape of the boxes quite limiting." Now the company is using timber-frame technology from Canadian manufacturer MIC-Alouette. "It is a bit galling to have to go to Canada, but they could offer the flexibility of a short factory run. We couldn't get the flexibility in the UK and not all the timber-frame manufacturers in Canada could offer us that," he says.

The housebuilder says it is sacrificing some buyer choice in using off-site manufacture, but believes that is worthwhile. "We've put so much time and effort in that buyers won't need anything different," says Sunley.

Ultimately, however, HTA's Derbyshire sees off-site manufacture giving the customer greater choice. At Oakridge Central a website allows tenants and potential buyers to experiment with external options, adding a bay window or even changing the colour of the render on their house. "We see this as a slow and incremental approach to mass customisation," says Derbyshire. "We have to look at things incrementally because of cost. This is the beginning of the process, not the end. We have to look at all projects as being part of a continuum."