While we all know what disruptive tech looks like, what does disruptive housing look like?
By almost universal consent, three problems need to be addressed in the current market – affordability, sustainability and quality – and whoever conquers all three will seriously shake up the UK market. Yet architect Richard Hywel Evans thinks he, along with his business partner Nick Fulford, has cracked it with the nHouse. The “n” stands for “new”, as it aims to differentiate itself from so much of what has come before.
They’re manufactured in parts off-site, then delivered to, and assembled in, a location of the buyer’s choosing. So far, so pre-fab, but the entrepreneurs believe this is the first time modular housing has been delivered to a higher standard than the average new build, yet below the price.
“In the last few weeks, we’ve had some of the biggest housing developers and associations come to see us,” says co-founder Fulford. “The fact that RIBA did a survey that said only one in four people in the UK would even consider buying a new build is reflective of the fact we are not enamoured with the majority of products offered by the main housebuilders in this country. So there’s a desperate desire for an alternative.”
Only seven per cent of homebuyers are building their own homes and I think the next lowest figure in Europe is 25 per cent
The idea first came to Fulford following a holiday in the Alps, where he fell in love with the eco-house he was staying in. When he returned home, he couldn’t find anything like it to buy on the open market and encountered extortionate costs when he sought the advice of custom-builders. So he contacted friend and architect Evans, director of Hoxton-based Studio RHE, to see if he could design something similar, but tailored to the UK market.
If nHouse were a dish, its secret ingredient would be CLT. Cross-laminated timber is a sustainable, engineered wood that consists of layered panels that are glued together to achieve a desired thickness. “It’s the most sustainable building material we can use. It has incredibly high structural capacity and bearing, and it’s endlessly available,” says architect Evans.
CLT is a material that’s being increasingly explored within the housing sector in the UK for its low environmental impact, but also for its versatility. And it’s particularly useful for modular or custom housing because it’s easy to modify. “If it arrives on site and something isn’t quite right, you can work with timber,” Evans says.
“With a concrete framework, if it doesn’t work, you have to take it away and recast it, whereas with timber, you get your power tools out and you can trim a bit here and there. It’s an extraordinary solution to what we need at the moment.” In this post-Grenfell world, it’s worth mentioning that it’s also naturally fire-resistant. Hold a flame to CLT and it’ll char the outside, but maintain a surprisingly robust structural integrity.
Once the material was decided, it was time to focus on design. Each room can be packed up into a minimum of four modules that take 16 days on average to be assembled in a factory. Then they’re ready to be transported on the back of a lorry to the desired site and connected via a patented attachment system developed especially for nHouse called QuadClick that allows the whole property to be constructed in as little as three days.
Once the design was completed, Fulford got to work on the branding and marketing to make sure the concept was developed in time for MIPM, the annual real estate bonanza in Cannes. Their exhibit elicited approving nods from venture capitalists, but Fulford had other plans.
He sought alternative funding on the crowd-funding platform Crowdcube, where the project doubled its fundraising target, gathering more than £1m from over 700 investors donating between £10 to £200,000. Crowdcube has since valued the business at over £6m.
Initially, this put investors off, as the valuation was fixed and share prices couldn’t be negotiated, but Fulford felt the traditional investor route was not for nHouse. By spurning the advances of venture capital, the founders would retain full control over the project, while reflecting its democratic ideals.
“When we say we are building quality homes for people on average incomes, we want this to be a mass market house,” says Fulford. “Being able to have the opportunity for anyone to invest perfectly suited the results of the campaign. They come from all backgrounds and all parts of the world and they’re excited about a solution, to not just UK house prices, but broader house prices that exist globally with so many people underhoused.”
This investment allowed Evans and Fulford to push ahead, going from concept to a prototype in 12 months. Now MPIM 2018 is over, the show house lives at its first production facility in Peterborough and the order book opened a month ago.
Price is another area where the nHouse thinks it can compete. Individual buyers can snap a three bedroom one up from £180,000, while a Hamptons International study from 2017 puts the average price of a one bed new build in London at £679,681.
What’s more, nHouse claims its properties are 20 per cent bigger than the average new build in the UK, with more windows, higher ceilings and bundles of tech. Each one comes with a house management system, a car and house battery pack, in-built guttering that reuses rain water in the plumbing, a solar panelled roof to reduce energy bills, underfloor heating and even futuristic luxuries like a robot vacuum cleaner and a drone landing pad.
The result is a sleek space with lots of on-trend exposed timber blocks. “We kept talking about sauna fear,” says Evans. “We were putting coverings over the wood because we didn’t want it to be a wooden box. But then once we’d finished the show home, we thought it looked really great to expose the wood and when people have come to see it, they’ve been inventing reasons to have one, going, ‘Maybe I could have one of these in my garden?’”
The show house can also be seen up close at self-build mecca Grand Designs Live, which arrives at ExCeL London next week, not least by some of its investors. Tickets were handed out as backer privileges, along with discounts for bigger investors on the final nHouse.
Now it’s on the market, this isn’t the end of the road for the investors. Fulford says he wants to use the 700-strong group as a cross between a board and a market research group, going back to them for inspiration and improvements.
“We treat them as a privileged club and a resource,” says Fulford. “Unlike when you have a single VC when you might get access to talent from their board, we have 700 advocates and supporters and this amazing pool of high quality ideas that we can tap into. They all essentially want to promote our business and their investment, but they also like the concept.”
Usually, if you want to self-build, your solutions are to be found abroad with German or Scandinavian companies like Passivhaus and Huf Haus. And these are often expensive, not because they’re necessarily better quality, but because they have almost unlimited options. “It’s a very expensive process to create a bespoke house,” says Fulford. “So we minimised the number of options, but increased the quality of what we do have and, through economies of scale and mass procurement of the same materials again and again, brought the price point down until we’re offering homes at £125-130psqft.”
Fulford even claims the nHouse, and other modular businesses like it, won’t need the construction workers that could be in short supply once freedom of movement ends because of the simplicity of its assembly. “Two factors making the government’s housebuilding targets more difficult include massive infrastructure projects like Hinkley Point C and HS2 – both will soak up a lot of labour – and we’ve got an increasingly ageing population of people working in the building trade. With us being able to build homes in a factory, we can be a lot more efficient and keep costs down when, across the board, you are going to see labour costs in the building sector increase over the next few years.”
While the nHouse might be Brexit-proof, there are two huge cultural barriers it has to tackle before it can really take off.
The first is the lack of self-builders in the UK. Yes, we all enjoy watching Kevin McCloud wander around modernist monstrosities in the Sussex Downs, but these self-builders are still seen as monied eccentrics. And this has been borne out in nHouse’s order book, where the vast majority of purchases are from developers. Once a private buyer has acquired land, there are advisors on board to help with planning permission and a number of building societies (and one high street bank, Virgin Money) to provide a mortgage for it through self-build finance service BuildStore.
“Only seven per cent of homebuyers are building their own homes and I think the next lowest figure in Europe is 25 per cent. So the majority of product you see coming onto the market is supplied by the 12 big housebuilders,” says Fulford, “and what happens when you have a very limited number of companies supplying a marketplace? Where’s the incentive to innovate in terms of product quality, design and to reduce prices?”
The second is creeping urbanisation. According to the UN, the number of people living in cities is set to increase to 66 per cent of the world’s population by 2050 and, with land around big cities running out, this means building higher or expanding out towards rural areas. This means flats, and lots of them.
Currently, nHouses can be set up as a detached, terraced or semi-detached house, but plans for lateral apartments are already under-way. However, CLT is notoriously hard to build at height, having to be reinforced by another less environmentally friendly material at some stage. The tallest CLT buildings in the world are currently Dalston Works, a block of flats in Hackney, and 5 King Street, an office block in Brisbane, and both are only 10 storeys.
With city accommodation in ever-increasing demand, land values inevitably rise to extortionate levels, locking all but the big-name developers out of the house-building game. The co-founders of nHouse say they are merely manufacturers, and if developers want to build their homes on expensive land and that pushes the price up, there isn’t much they can do about it. While they’re trying to get the price for a single unit down to around £110,000, for now, they are focusing on the quality of the product to shake up Britain’s elite club of housebuilders.
“The only way we can attract them is by threatening them,” says Evans, matter-of-factly. “If we are offering a better product at the same price on a site where they’re in competition, then they have to react. If we can do it better, with better guarantees, and none of these horror stories you read about with new builds, because they’re better built homes, then people will choose us instead. They will react once they’re threatened by genuine competition.” Bring it on.
To find out more, visit the-nhouse.com