Despite the industry's best efforts, insurers and mortgage lenders are still wary of homes built using modern methods of construction. Will a robust new standard from BRE, designed specifically to test durability and ease to repair, assuage their fears?

Proponents of modern methods of construction have always struggled to convince insurers and mortgage lenders of their systems' worth. Indeed, their very modernity has led them to be regarded with caution. Whereas traditionally built homes are backed by a wealth of historical data regarding their long-term performance, this is not the case with MMC. As a result, housebuilders find themselves having to amass reams of paperwork to demonstrate that each component meets an acceptable standards. Even then, insurers and lenders' requirements tend to be more demanding than the existing accreditation. And, thus, their lack of enthusiasm for MMC can spread to housebuilders.

A standard introduced at the end of last month could change all that. Developed by BRE with input from the Home Builders Federation, the Council of Mortgage Lenders, the Association of British Insurers, the NHBC and the ODPM, LPS 2020 sets out to measure whether building systems offer good long-term performance. It is hoped that its more exacting standards will give the housebuilding industry confidence that buyers of homes built using MMC will get mortgages and that their insurance premiums will be reasonable. "MMC are believed by many to be the way forward," says Dave Mitchell, technical director at the HBF. "It will help to develop this market if we can give people the assurance that innovations are certified. I think it will help the industry to move forward with MMC."

Despite the industry’s best efforts, insurers and mortgage lenders are still wary of homes built using modern methods of construction.

Credit: Steve Frickler

What types of building systems will be covered?

Although BRE prefers to use the term "innovative" rather than "modern methods of construction", LPS 2020 is aimed primarily at the certification of building systems, elements and components for residential construction that are not wholly covered under current recognised standards and codes and that have a limited track record of service in the UK. According to Jaya Skandamoorthy, associate director at BRE's construction division, the standard is more appropriate for mass-produced dwellings as it assesses the whole system to evaluate how components work together. BRE says LPS 2020 is designed to prevent expensive and time-consuming testing procedures to satisfy each stakeholder separately. Where manufacturers have existing test or approval evidence, the certifying body will simply review this for scope and adequacy. If a manufacturer has adequate evidence, the cost of gaining the LPS 2020 standard is estimated at about £10,000.

LPS 2020 is neutral in that it doesn't make any reference to specific materials. The absence of design standards for closed-panel timber frame systems, for example, makes this product a strong candidate for certification. The same can be said of structural insulated panels, which do not have any recognised design standard in the UK. However, open-panel timber frame makers have less need to go through the certification process because there are British and European standards for these, so they already have the confidence of the industry.

The standard is performance-based and has to provide insurers and mortgage lenders with an accurate assessment of the reliability of the dwelling over a period of time. Nick Bason, policy adviser for fire and arson at the Association of British Insurers, says insurers need to have every confidence that a building will perform to a certain level. As well as covering the requirements of the Building Regulations, LPS 2020 addresses durability, resilience, ease of repair and whole-life performance and adaptability. Bason says: "The whole-life cost of a building is a key factor for insurers. Insurers will look for houses to be built to this standard." He is convinced the standard will increase the market value of houses. "If a house is endorsed by this standard, its marketability will improve," he says.

Despite these benefits, the industry might be reluctant to adopt LPS 2020. Darren Richards, managing director at off-site consultant Mtech, warns that some people see it as another level of bureaucracy. He says: "BRE has organised workshops to get the industry's feedback, but the industry felt it was going to be imposed on them." Some people are concerned that LPS 2020 duplicates existing certification systems, Richards adds. But he thinks the standard will be accepted if it is embraced by housing associations and developers working on large-scale schemes. One firm has already seen the benefits ("A manufacturer's tale").

Meanwhile, BRE is already planning its next step. Skandamoorthy explains that it hopes to extend LPS 2020 into an on-site quality control procedure. Under this proposal, manufacturers would have to provide installation guidance and an on-site checklist to enable critical details to be inspected for quality and performance in the finished dwelling. He says: "Our ultimate goal is to create a certificate of conformity on a whole house. But we know there is a long way to go."

A manufacturer’s tale

Spaceover, Building’s 2006 manufacturer of the year, is the first firm to have been issued a LPS 2020 certificate for its modular building systems. Joint managing director and co-founder Tony Fox says his company works mainly in social and private housing and a recognised certification is a requirement on a framework agreement. “LPS 2020 is a go-ahead because people know your building is going to perform,” he says. Spaceover’s accreditation comprises the system’s high acoustic performance, low levels of heat transmittance, high fire resistance, weather tightness and durability.

Fox thinks the new standard shows that BRE has taken a step further from its traditional certification system because LPS 2020 covers aspects such as security, durability and repairability. Moreover, certification comes with a financial reward. Fox says: “Our houses will get a lower insurance premium because the certification caters for all the concerns the insurance companies have.” The Council of Mortgage Lenders has declared that Spaceover’s system is mortgageable and sales have already followed. Fox adds that during a recent open sale for 21 units, 11 apartments were sold within the first two hours.