Leading housebuilders have been gearing themselves up to provide modular housing in anticipation of a push by the government to back off-site manufacture.
Well-known companies such as Barratt, Willmott Dixon, Westbury and Taylor Woodrow are all at varying stages of establishing enough capacity to build more than 11,000 units a year by 2004.

Barratt has recently teamed up with manufacturer Terrapin to investigate modular housing. A spokesman said: “We have completed some prototype work which has produced highly satisfactory results and we are progressing to the next phase.”

Westbury already has a dedicated modular housing branch called Space4, which is planning to double production levels by next year.

Such activity is seen as crucial by the off-site working group, which has held a series of meetings with the Office of the Deputy Prime Minister over recent months to discuss modular housing in the social housing sector.

Simon Dow, chief executive of the Guinness Trust and chairman of the off-site manufacturing working group, said that having mainstream volume housebuilders on side would ensure the public acceptance of modular housing.

Dow added: “We would like to see a programme that would commit £50m a year. But this may possibly be staggered over three years such as £20m, £50m and £70m.”

The Peabody Trust is understood to be working with engineer Arup and housebuilder Taylor Woodrow in developing a system for concrete modular housing.

Discussions are believed to be about investing in a factory to use the new technology.