Thousands of flat-pack homes to be constructed at huge Yorkshire factory and distributed nationwide

The completed houses will be moved to locations across the country and set down on plots of land

A flat-pack home in West Linton, Scotland, made by the German company Huf Haus (Wikimedia)

Thousands of flat-pack homes are to be constructed at a huge factory in North Yorkshire, the largest facility of its kind in Europe, after the financial-services giant Legal & General (L&G) announced it is to enter the housebuilding market.

The completed houses will be moved to locations across the country and set down on plots of land – a process considerably quicker than traditional bricks and mortar – providing a boost to those trying to get on to the housing ladder.

The UK has a severe shortage of workers with traditional construction skills, and although housebuilders have been increasing their output, experts including the House of Lords’ committee on the built environment have warned that they lack the capacity to produce the Government’s target of 200,000 homes a year.

Although L&G already owns a 46.5 per cent stake in the upmarket housebuilder Cala Homes, the new venture will be carried out by the wholly owned entity L&G Homes. The insurer declined to comment. If the new 555 sq ft factory in Sherburn-in-Elmet is successful, the insurer plans to invest up to £500m on facilities at other locations, according to the Financial Times.

L&G has already announced it will launch a £600m “build-to-rent” fund to develop purpose-built tenanted blocks using money from its own balance sheet which will then be matched by the Dutch pension fund PGGM.

The UK has been slow to take up prefabricated houses which are partly built elsewhere and then assembled on-site. However, when the method – which is popular in other markets, including the US, Canada and parts of Europe – has been used in Britain, it has been successful.

Last year, the YMCA launched Y:Cube, a London project designed to provide accommodation for young, homeless people moving out of shelters, creating 36 one-bedroom flats inside a 26 sq m unit. Inventors and designers from all over the world are also able to download building plans from WikiHouse, an open-source project offering a library of low-cost, flat-pack-home designs which can be customised, locally manufactured and self-assembled.

L&G’s venture could act as a “catalyst” for other firms taking off-site production methods more seriously, Lucian Cook, the head of residential research at the estate agency Savills, told the Financial Times. “You don’t have anyone delivering significant volume into that market,” he added.