The big issue now and for the foreseeable future is getting more affordable housing built in the South. Off-site manufacture is the government's preferred solution, but the industry fears it is a high-cost route that is incompatible with low-cost housing. Who's got it right? To settle the argument, Homes asked Stan Bruin, director of cost consultant Monk Dunstone Associates, to referee a two-round bout between OSM and traditional build. Fellow director Keith Bowler will pronounce the winner
The fight rules
Costs are based on a 4500 m2 social housing scheme, excluding site development costs and professional fees. The 50-unit scheme comprises two-storey houses and three-storey apartments, procured on the basis of a design and construct contract at present day prices, over a 60-year life cycle.

The contestants
In the red corner A full-on off-site manufactured scheme, that uses a panellised system with brick external envelope, roof cassettes and concrete-tiled roofs.

In the blue corner Traditional build. Need we say more?

Fight commentary
OSM lands the first punch as it is marginally cheaper in capital cost, assuming that the manufacturing facility is producing sufficient quantities of units to justify economies of scale. Life-cycle costs can be reduced and controlled more easily, too, and repairs and renewals should be less frequent. But OSM fails to land the decisive blow as the key to big savings is based on the early involvement of the designer with the manufacturer and on getting those economies of scale.

Keith Bowler's verdict
"The industry has a habit of taking a negative view of innovations in construction. The perception that OSM is "uncommercial" is rather short-sighted and ignores the fact that, with an optimum number of dwellings, it can be a cost-effective solution.

The key to cost-effective OSM is economies of scale. A minimum of 35 dwellings, but preferably 50, is required. However, in order to realise the full benefits in cost and delivery terms, the real economies of scale from volume production will be achieved in much larger schemes.

Criticism that homes built using OSM are low quality is based on impressions of the prefab dwellings of the 1950s and 1960s. As The Peabody Trust's Murray Grove scheme in London and subsequent OSM-based schemes prove, homes built using this method can create desirable places to live. The government's primary objective is not to provide a quick fix by using OSM but to provide well-designed new homes as quickly as possible.

Two major risk areas for projects are time and money. Site processes for OSM schemes can be 40-60% shorter than traditionally constructed schemes.

Established OSM production plants, primarily located in the Midlands or further north, can only cope with 4-6% of the new homes needed. The government's target that 25% of new homes funded by the Housing Corporation must be built using OSM from 2004/05 will inevitably increase supply and demand.

Increased demand, and the money made available by the Housing Corporation to fund the procurement of public housing from approved suppliers of manufactured housing, will lead to increased production and automation, a greater choice of products and more plants in the South-east, where the demand is greatest. Criticism that OSM brings high start-up manufacturing costs and uncertainty of the cost over the building's life cycle will be eliminated.

Result: A win for OSM, on points.

Related files/tables