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Housing Need

All Set and Ready to Lead…India will be at the Head of the Pack for Post-COVID Growth

By COVID-19, Housing Need, India, Mainstream Impact Investment, News

In last month’s Asia 2021 Outlook (www.nomuraconnects.com), Nomura forecast a 9.9% growth in Indian GDP by the end of 2021: that’s more than China (9%), and way more than the UK (5.5%) and the United States (4.7%), all of which are running off historically low recovery platforms as a result of the Pandemic.

The UK’s forecast, for example, may be the highest since the 1980’s, but according to the Office for Budget Responsibility (“OBR”) the economy will not return to pre-Pandemic levels until the last quarter of 2022. Investors would do well to remember that even a dead cat bounces…

On the other hand, India is expected to go on to deliver GDP growth of 11.9% by the first quarter of 2022, far higher than pre-Pandemic levels.

None of which should come as any surprise.

Post-COVID Growth

Before COVID gripped its chill hand on economies across the planet, GDP on the subcontinent was growing at a rate of 5.02% annually, barely half of the figure now being forecast by Nomura for the coming year. So unlike the UK there’s certainly something more than bouncing back at work here. Just look at the underlying data…in the second quarter alone, Nomura expects Indian GDP to grow by 32.4%, which means the so-called “base effect” of COVID will be completely eliminated on the subcontinent within six months (as opposed to two years in the UK).

Ten years ago the comparable (World Bank) figure for growth on the subcontinent was 8.5%, and in 2016 it was 8.26% (www.worldbank.org). So the latest Nomura forecast is well within the parameters of an already established, upwards growth trajectory. In fact, at 9.9%, it even foreshadows a sharp(ish) upwards tick over the near term.

And once again, that can be usefully contrasted with comparable trends for the UK economy over the same period. In 2010 GDP grew in the UK by 1.95%, but by 2016 it had fallen back to 1.92%. And before COVID struck, it had fallen back again to 1.41%. That’s why even on the basis of the latest OBR data (www.obr.uk), any UK recovery will still be two years behind India, heading for a downturn on what are already historically low figures. There’s no sign of an upward tick any time soon in the UK, sharp(ish) or otherwise.

So what’s the reason for those stark differences, and what does COVID have to do with it?

Well, there are three key indicators.

First of all, the UK has built up a staggering Budget Deficit of £394 Billion for the year to March 2021: struggling to balance massive recovery spending with dwindling tax receipts.

As a whole, UK national debt currently exceeds £2 Trillion, which is more than 100% of GDP, and its expected to stay that way for at least the next five years. Putting it mildly, none of this is a healthy foundation for future economic growth.

But even allowing for post COVID growth and recovery programmes on the subcontinent and an unprecedented level of public infrastructure spending, India’s deficit is only 17.9% of projected GDP (less than a fifth of the UK figure), so it has vastly more headroom for growth.

And then, secondly, there’s that tried and trusted bellwether of growth: Inflation.

As Keynes once said, there’s no inflation in a junkyard: upward pressure on prices is usually a reliable indicator of healthy levels of consumer demand, and demand is a significant driver for growth.

In 2020 the UK inflation rate slumped to 0.3%, which is the lowest level on record. And there’s a double whammy too: as the economic strictures of COVID are eased, inflation is likely to rise with a parallel increase in interest rates: so it’s not a good time to be holding £2 Trillion in debt (see above). On the other hand, inflation on the subcontinent is currently 4.95%, which is slightly higher (but not disturbingly so) than the midpoint 4% target maintained by the Reserve Bank of India since 2016, and in turn that reflects a robust level of consumer demand as a result of a burgeoning, increasingly wealthy and product hungry population.

And then, finally, there’s Housing: an Englishman’s home isn’t just his castle, over the years it’s been a pretty good investment too.

Despite the shocks of COVID and the worst recession for three hundred years, house prices in the UK rose to a six-year high at the end of 2020, which speaks to a certain confidence in the future…or does it? Across the board, analysts in the UK are now predicting a sharp decline in house prices.

Halifax (the country’s biggest mortgage lender) expects a fall of between 2% and 5% over the coming year, and the OBR is even more of a Cassandra: forecasting an 8% drop in prices during 2021. That’s certainly not a trend reflected on the subcontinent…house prices are going through the roof from Mumbai to Chennai.

So with strong fundamentals in Housing, Monetary and Macro Economic policy, India seems all set for further growth; and despite the fact that the traumatic impact of COVID must induce a necessary caution into any forward looking analysis, there’s little reason to doubt Nomura’s figures. After all, history has given us the compelling lesson of Spanish Flu: a hundred years ago we were also socially distancing, wearing masks and watching fearfully as old certainties crumbled away. But within two years global economies had bounced back with a vengeance… there’s no reason to doubt that they can (and will) do it again.

Expect India to be at the head of the pack when they do.

Executive Overview

The World has come a long way since March 2020, and we’ve learned a lot of lessons along the way: but with effective vaccines now on the horizon, and signs of economic recovery emerging across the Planet, it’s time to look to the future. All of the data now suggests India will be playing a leading part.

If you would like to know more about joining our Mainstream Impact Investment journey click here

Voting with Their Feet…Indian Migrant Workers are Redefining the Subcontinent’s Housing Market

By Affordable Housing, COVID-19, Housing Need, Housing policy, Modular Construction, News

India’s migrant workers are voting with their feet: streaming onto railways and roads, taking to bikes and byways and making their way back to the Cities they deserted in the aftermath of the pandemic. It’s the biggest movement of people on the subcontinent since Independence more than seventy years ago, and it’s set to have a profound impact on the future of Subcontinent’s housing market across India, from Chennai to Mumbai and all points in between (more of which in a moment)…

Movement of workers back to the cities

A recent survey conducted by the Inferential Survey Statistics and Research Foundation (snappy name, snappy stats) reported 67% of 2,917 migrant workers from 34 Districts are determined now to make their way back to jobs in the City (www.issrf.org.in): a fact already confirmed by the volume and value of cash transfers since the lockdowns were imposed in March.

That old reliable bellwether of migrant activity: sending money home to mum and dad. In the first few weeks after COVID-19 struck cash transfers fell in value by up to 90%, but now they’re back now at 85% of pre-pandemic levels…a sure sign workers are moving in high numbers from the countryside. And since August, non-suburban passenger traffic on India’s railways has virtually doubled.

It’s impossible to overstate the importance of this trend, given migrant workers make up 20% of the subcontinent’s workforce and play a vital part in the success of a number of key sectors: especially informal market segments and MSMEs, which together make up 50% of the subcontinent’s GDP.

No surprise then that for India’s construction sector, which is particularly reliant on migrant labour, the Modi Government has been keen to roll out a raft of new measures to make sure they get back on site as quickly as possible. In May the Minister of Home Affairs produced a policy paper recommending migrant workers should be automatically enrolled for Ayushman Bharat: the Government’s flagship health insurance scheme, providing them with ready access to cashless medical facilities on site (which the vast majority either don’t have back home in the countryside, or are denied by discordant local government regulations). There will also be a new Migrant Workers Welfare Fund to make sure help housing assistance gets to where its needed most (which in this case means India’s Cities: www.labour.gov.in)so you can be sure the pace of urbanisation on the subcontinent isn’t going to be slowing down any time soon.

India and the Subcontinent’s Housing Market

And given India’s already burgeoning need for affordable housing, it should come as no surprise either that the demand for City based real estate is likely to result in an unprecedented surge in real estate growth.

All those workers have to have somewhere to live…and there’s certainly no shortage in demand for something to build.

Which brings us back to Chennai and Mumbai: along with Bangalore, both have become centres of technological excellence, as India continues to establish itself as the planet’s distribution hub.

Skilled workers are moving there and new infrastructure systems (roads, railways and business parks) are being created on an almost daily basis, pushing house prices through the roof (so to speak). That’s undoubtedly a trend that is likely to gain added vigour from the return of migrant workers.

India needs those construction workers back on site, but it also needs to deliver affordable homes at sufficient pace to meet the dizzying needs of what was already the fastest growing population on earth.

That’s why developers on the subcontinent (and around the world) are increasingly turning into modular construction technologies, which not only reduce delivery times by 60% but also ensure cost efficient and compliant delivery standards. This is a sure-fire way to improve the subcontintent’s housing market.  

After all, as India votes with its feet, it also needs somewhere to live…

Executive Overview

Modular Construction delivers faster, at lower cost and with higher quality than traditional alternatives: it’s perfectly positioned to meet the growing demand for affordable housing, not only in India but also across the world.

So as we welcome news that migrant workers are coming back to the Cities, yes: let’s give them somewhere to live too.

If you would like to know more about joining our Mainstream Impact Investment journey click here

Better Connected than Ever? – How Connectivity boosts Indian Real Estate.

By Affordable Housing, Blackstone, Construction Technologies, COVID-19, Economic Growth, Environmental Policy, Housing Need, Housing policy, India, Natural Capital, News, Real Estate Markets, Sustainable Growth

All roads lead to other roads: a dizzying complexity of cables, rail and road networks have literally girdled the earth, making us better connected than ever before. A hundred years ago it took twenty days to travel by steamship from London to Mumbai, now it takes nine hours by plane.

Subject to lockdown restrictions, you can cross the English Channel in two hours by ferry (plus three more waiting for the driver in front to get back to his cab), or else zip through the Tunnel in 30 minutes; and the electrons that carry your Internet messages travel at 2,200 Km a second, which is probably why Zoom is doing so well at the moment.

But none of this happened by accident: it was all planned, built and delivered to meet economic demand…except, of course, the electron, which does what it does by itself. Economic progress is everywhere driven by connectivity.

And that’s where Big Government comes in: periodic swings in the private funding cycles needed to build all those airports, roads and railways are increasingly being offset by government deficit spending programmes (or quantitative easing as it’s now known: the deficit’s more attractive, younger sister). Only big government is big enough to dampen regular (and inevitable) private sector investment fluctuations, which is why most advanced economies over the last forty years have set fiscal spending targets of up to 20% of GDP.

Nothing less will level out the swings and troughs, and without it the roads, railways and airports won’t get built at all…the Channel Tunnel started out as a private venture, ran out of money and finished up nationalised in all but name. Without Big Government you wouldn’t be able to zip under the Channel …you’d be stuck behind a lorry at Dover.

It’s a lesson India has taken to heart.

Connectivity boosts Indian real estate. How?

Over the next ten years the subcontinent is expected to invest a staggering $715 Billion in its new rail networks, with full electrification expected by 2024 and the entire system becoming carbon neutral by 2030 (www.ibef.org/industry/indian-railways).

By 2050 India’s railways will comprise 40% of rail services across the world, meeting a surge in passenger numbers driven by an increasingly wealthy travelling public. All of this is being powered by Big Government (Prime Minister Modi’s Government to be precise): including a programme to expand investment in new rail terminals, new stations and more extensive container operations across the subcontinent (www.outlookindia.com).

And the picture is pretty much the same on India’s highways where the network has doubled in size (from 71,000 Km to 142,000 Km) in the last ten years. As with rail, the expansion is being driven at pace to meet unprecedented levels of demand from a burgeoning and increasingly wealthy population, in stark contrast with the United Kingdom where road traffic levels have increased by 80% over the last twenty years, but capacity has risen by a sluggish 10% annually: and even that unimpressive figure is falling off year by year.

All of which means India is now better connected than ever before; and in combination with those same (unprecedented) demographic trends on the subcontinent, enhanced connectivity is also having a radical impact on India’s domestic housing markets. New Science parks in Chennai and Bangalore and new railways and highways in Mumbai are pushing prices through the roof as an increasingly urbanised population embraces the opportunities offered by better communication systems.

The improvements to connectivity boosts Indian real estate. So with all roads leading to other roads, it means we’re better connected than ever before…but nowhere is that more apparent at the moment than India.

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Executive Overview

I suppose it’s a truism that property values are all about location (and location, location): but what’s interesting in India at the moment is just how radically the location itself is changing.

Taken together with an increasingly wealthy, tech savvy and burgeoning population, the Modi Government’s radical infrastructure programmes are re-shaping the commercial environment and pushing property prices higher than ever before.

A Disruptive Innovator…Modular Construction has become Housing’s Future

By Affordable Housing, Construction Technologies, COVID-19, Economic Growth, Environmental Policy, Housing Need, Housing policy, Modular Construction, News, Productivity, Sustainable Growth

“The arrogance of success is assuming what you did yesterday is enough for tomorrow”: William Pollard wrote that 100 years before Disruptive Innovation theory was formulated in 1955’s Harvard Business Review, but he perfectly captured the essence and importance of understanding disruption innovation in a modern economy.

Think of established companies like Amazon, Google and Uber, business models that have all disrupted existing markets and delivered outcomes that are radically reshaping our future (and our present come to that).

But disruptive innovation is driven as much by market need as invention, and burgeoning housing demand across the planet is currently driving change like never before…so welcome to the world of Modular Construction, and a new future for housing.

Using outmoded technologies, traditional construction companies have become increasingly focused on long-term (high value) projects, where profit margins are high enough to nurture a culture of inefficiency.

All those piles of rusting steel and timber left scattered around when the project finishes, fossilised remnants of yesterday’s world: all those days lost to rain when workers huddle in huts waiting for the sun to come out, and still more days lost waiting for delayed (piecemeal) deliveries, brought slowly to the site by a seemingly endless convoy of lorries.

But, by definition, all that waste matters more if margins are tighter: on lower margin projects, waste and delay on such an industrial scale can turn a viable development into a loss-making disaster.

That’s why traditional developers have (traditionally) paid far less attention to affordable and mid market housing projects, preferring to focus on profitable customers and build yet another penthouse studded glass tower: the inefficiencies of their business model matter less when the client is a Russian oligarch.

Which means more rusting steelwork, more days lost and more time wasted waiting ankle deep in mud for the latest lorry full of bricks to make its way at walking pace through another inner city traffic jam. This outdated model largely ignores speed of delivery, because speed of delivery largely doesn’t matter. Russian Oligarchs have all the time in the world…they can wait.

But the homeless can’t wait: according to Shelter (www.shelter.org.uk) 320,000 people are currently homeless in the United Kingdom (one in 201 of the population), in the United States the figure is 567,000 (a year on year increase of 40% since 2017), and in India 1.77 Million are in housing need despite the Modi Government working to deliver its ambitious Affordable Housing Programme (www.bajajfinserv.in/housing-schemes), striving hard to meet the demands of the fastest growing population on the planet.

And that’s where disruptive innovation comes in…

Adopting smarter and more efficient technologies, smaller construction companies can challenge these dinosaur incumbents: targeting market segments they either can’t or won’t reach, and that means in particular the homeless and those in housing need.

Economic orthodoxy tells us these smaller (disrupter) companies will then move on to gain a progressive foothold in increasingly higher margin segments by delivering better functionality at a lower price.

By making use of their core technological advantage: and finally, the dinosaur developers will also adjust their own business model as disruption takes root: bad news for Russian oligarchs looking for another penthouse, good news for the rest of us.

Modular Construction is a paradigm case in point: units are fabricated off site and delivered in ready to build panels, so no more convoys of lorries delivering materials piecemeal and no more waiting endlessly for them to arrive.

Built to order in a controlled environment, modular units are also higher quality and waste levels are lower, and costs are lower too.

It enables modular platforms to deliver projects at a third of the cost of traditional alternatives, which is why they are moving into (and will eventually take over) lower margin segments in a way traditional developers at the moment find unfathomable.

And it’s why in time dinosaur developers will be forced to change their business model …that’s the power of disruptive innovation.

What we did yesterday is no longer sufficient for tomorrow: Modular Technologies are important for all our futures.

Find out more about Modulex

Modulex modern method of construction

Modulex is setting up the world’s largest steel modular buildings factory based in India. It was established by Red Ribbon to harness the full potential of fast-evolving technologies and deliver at pace to meet the evolving needs of the community.

Modulex is setting up the world’s largest steel modular buildings factory in India.

Executive Overview

According to McKinsey more than 80% of developers are now to a greater or lesser extent committed to modular construction models: that should come as no surprise to anyone. Modular construction delivers faster, at lower cost and with higher quality thresholds than traditional alternatives.

And now, more than ever, we need those benefits to meet the planet’s burgeoning housing need. It’s time for the world to move on…

Jaisalmer city and Fort at sunset

Joining the Dots for the Future…A walk around Indian Real Estate Markets

By Blackstone, Construction Technologies, COVID-19, Housing Need, Modular Construction, Real Estate Markets

History doesn’t move in straight lines, we’re much too unpredictable for that: so nobody should be surprised that in the same month as a group of glum beancounters at the Office for National Statistics reported a 20.4% slump in GDP for the UK (the worst ever), their happier colleagues at the Land Registry were trumpeting a 2.6%, year on year increase in UK property prices. There isn’t a straight line between the two: the underlying decisionmaking is just too unpredictable to allow for anything more than a childish squiggle. It’s what practitioners of the dark arts of econometrics call “a random walk”, like a drunk stumbling home from the pub: we know where he started out from and where he ended up, but it’s the bit in the middle that’s a mystery. Why did the catastrophic oil crisis of 1973 barely make a dent on US property prices, having sent the rest of the economy into free fall? Why did an otherwise localised slump in US property prices cause economies across the world to crash in 2008? These are random walks between two points (or pints in the case of our drinker) … the trick is to join the points up. 

Which means searching for medium and long term trends, key drivers that act as a platform for what the future might look like: and there’s no better example right now than India’s Real Estate Markets.

According to an influential IBEF forecast, Indian Real Estate will be worth $1 Trillion within the next ten years (from a base of $120 Billion in 2017), and by 2025 (just five years away in case we forget), the sector as a whole will make up 13% of the subcontinent’s GDP. That’s worth reflecting on: despite the near term, COVID driven shocks, not to mention the pandemic’s catastrophic impact on overall levels of social cohesion, there is no straight line in sight: the subcontinent’s residential and commercial property markets are showing persistent and robust signs of long term growth, and this particular honey pot is proving as attractive as it was when, in 2019, overseas and mostly private equity investors staked no less than $14 Billion in the sector.

Blackstone alone has invested more than $12 Billion in Indian real estate since 2018: including the first of the subcontinent’s newly established REIT’s, which raised $670 Million in 2019 in collaboration with Embassy Group.

In response to (and partly in anticipation of) that inexorable trend, the Indian Government launched a series of property-related initiatives, including the Smart City Mission: delivering more than a hundred better-connected infrastructure and technology centres across the country and offering a prime opportunity for investors. Add to that the recent launch of the Alternative Investment Fund (AIF), which green-lighted investment across 1,600, previously stalled urban housing projects in major conurbations from Mumbai to Chennai and, of course, the continued resurgence of the Affordable Housing Fund. Prime Minister Modi’s Government has also approved the creation of 417 new Special Economic Zones, of which 238 are now live. Impactful as it might be at the moment, COVID 19 has neither the persistence nor potential to stand in the way.

As Blackstone themselves could no doubt testify, Foreign Direct Investment is a key part of this mix: increasingly responding positively to enhanced levels of market transparency on the subcontinent, a transparency that has acted as a powerful nudge to create a more investment-friendly environment increasingly aligned to western markets (and due diligence requirements in particular).

So there’s no straight line to follow in these turbulent (short term) times, only an increasingly less random walk firmly rooted by a long-term compass. And, to repeat the point, there’s no better example of that at the moment than Indian Real Estate Markets.

Find out more about Modulex

This image has an empty alt attribute; its file name is Modulex-Logo-300x77.jpg

Modulex is setting up the world’s largest steel modular buildings factory based in India. It was established by Red Ribbon to harness the full potential of fast-evolving technologies and deliver at pace to meet the evolving needs of the community.

Executive Overview

Every so often we have to raise our eyes from the papers on the table, and goodness knows we’ve had enough to distract our attention from the bigger picture over recent months: that’s why, as we gradually emerge from global lockdowns, I’m confident longer term trends will be much more important than any of our day to day fixations.

I’m confident, in short, that the future can’t and won’t be navigated by straight lines…

asset mangement

Building Back Better… More than ever before, that means Modular Construction

By Construction Technologies, Housing Need, Modular Construction, Productivity No Comments

Building back after an external shock (like COVID) can present formidable economic difficulties, but housing and public sector programmes present especially complex challenges at the moment.
In this week’s Newswire we examine how technology and market forces are coming together to help us build back better.

Read More
Kota, Rajasthan, India,- March 2020 : Labour is working on a new construction of building in Kota

Compared with What?… Consolidation Counts in Indian Real Estate

By Construction Technologies, COVID-19, Housing Need, Housing policy, Modular Construction, Productivity

Compared with the same period in 2019, Real Estate sales fell globally in the last quarter by 80%: but the clue’s in the question, the rate of decline is constant across the globe, so territorial markets are more or less as stable and ready to move on as they were before lockdowns were imposed. In India, for example, a nine-year programme of deregulation had already created rapid market consolidation by the end of last year, with almost half of existing developers leaving the sector between 2011 and 2019: no bad thing frankly, given most of them were smaller, flighty operations; incapable of complying with increasingly rigorous safety requirements, GST Regulations and (darkest of all) financial compliance provisions: remember all those rupees under the bed that Demonetisation was designed to get rid of?  

Schumpeter called it Creative Destruction: in other words, we’re better off without them…

The plain truth is that COVID downturns are operating more or less uniformly across the globe and are (hopefully) short-term: experienced with equal force from Manhattan to Mumbai and Berlin to Beijing, but proactive market consolidation is what really matters. And when it comes to that, Indian real estate is showing every sign of embracing a period of successful change, making it stronger than ever before. Joseph Schumpeter would have been proud…

So, just for a moment, think back to the subcontinent in 2019, dented since by COVID, but already by then experiencing unprecedented levels of consumer demand, renewed confidence, greater access to finance and, more than anything else, the success of the Affordable Homes Programme under Prime Minister Modi’s stewardship. These are the same conditions that are locked and loaded into India’s future as it emerges from pandemic restrictions. Even the most cynical observers can’t claim they’ve gone away…

All of which makes the second wave of consolidation increasingly likely on the subcontinent: already cleared of developers with little or no regard for compliance strictures, we can now look forward to radically improved business practices, new and improved sectoral strategies and key changes in construction technologies (with Modular Construction front and centre of the pack). Any Developer still clinging to outdated bricks and mud technologies, blinkered to the reality that growth will come by building affordable homes rather than another glass skyscraper in Mumbai, are certain to be consigned to the wastebasket of history.

Recent market studies forecast developers wedded to one or other of those fossilised views, some 30% of developers in all, are likely to leave the industry (forever) within the next year.

So, it’s true, property sales have fallen because of COVID: but that’s neutral, it’s the same the whole world over. Look instead to what pre-COVID economies looked like before COVID snapped its jaws, and nowhere is there a more resilient market than on the subcontinent: poised to become the most populous on the planet, more aspirational than ever before, increasingly urbanised and better connected than at any point in its history. Previous consolidation has made Indian markets leaner and better able to address challenges, but they are now profiled for future consolidation, and that will make them stronger still.

Find out more about Modulex 

Modulex Construction is the World’s largest and India’s first Steel Modular Building Company. It was established by Red Ribbon to harness the full potential of these fast-evolving technologies and deliver at a pace to meet the evolving needs of the community.

Executive Overview

There is a severe shortage of domestic housing stock across the globe: but as economies start to kick into gear after emerging from worldwide lockdowns, I’m sure those with solid and resilient foundations will be most successful in meeting burgeoning demand.

India went into lockdown ahead of the field, and it looks like it’s going to come out ahead of the pack too…

Modular prefabricated houses made of panels with large panoramic windows.

Not so much a Policy Imperative as a Crisis…Modular Construction has the Answers

By Construction Technologies, Housing Need, Housing policy, Modular Construction, News, Productivity

Best estimates are nearly 250,000 people left London during the COVID lockdown to live in their second homes, seeking comfort in a pale view of the hills or the slopping of the sea (or, in Dominic Cummings’ case, the car park at Barnard Castle). And some of them, perhaps looking for a third home, spent the idle hours rootling around the Internet looking for property bargains, with real estate prices slumping in the UK by 10% in May alone (they’ve rallied since, thanks to a new Stamp Duty regime). So what’s wrong with this picture? Well, for at least the last thirty years the UK, and London in particular, has been cursed by a shortage of new homes: housing lists have never been longer, rents have never been higher and houses and flats never more expensive than they are now. The UK also has steeply rising rates of eviction, radically increased homelessness and a new generation of millennials who are resigned to sleep on a friend’s sofa or face the prospect of living with their parents into their forties.  

Being locked in during the lockdown was no picnic for any of us, but spare a thought for how hard it hit the homeless and those living in overcrowded flats with children climbing up the walls and no garden to escape to. Spare a thought for those who were safe and secure in March, only to emerge from the lockdown with no job and the imminent arrival of eviction papers. These are real issues facing real people every day. We can’t all escape to the hills and the seaside…

And the United Kingdom certainly isn’t alone in all this: India to is facing an acute housing shortage and in the United States (the richest country in the world, lest we forget) no less than 567,715 people are homeless: that’s seventeen in every ten thousand.

So what’s to be done? 

First of all, let’s express the issue with a little more clarity: current housing policy, not just in the United Kingdom but across the globe, has so far been driven by a series of policy imperatives designed (unsurprisingly) to make builders build: low-interest rates, soft planning protocols, minimum regulatory thresholds and (at least until 2008) liberal financing structures. All of them working to the advantage of investors in real estate and existing homeowners: supporting the stock of existing housing wealth, but doing little or nothing to create new, low cost and environmentally friendly homes for those with more pressing housing needs: Stamp Duty reforms are no kind of answer.

And as part of this increasingly polarised dialogue, excessively high front-end construction costs are often (indeed usually) cited as a driving factor. Building new homes on conventional models is expensive, and governments are reluctant to invest directly in new programmes: so even though local authorities in the United Kingdom can now borrow to build, for decades now they have received virtually nothing from Central Government towards funding affordable housing programmes. 

But it doesn’t have to be that way…

The technology already exists to create new homes at volume and at pace, not only with lower front-end costs but lower costs across the board: and with significantly more environmentally friendly outcomes too. Modular Construction allows units to be created off-site in controlled conditions, with delivery rates three times as fast as traditional methodologies, lower development costs and optimal quality. So its no wonder the McKinsey Global Institute reported this year that Modular Construction in European and the US Markets will be worth $130bn by 2030. Not only is it quicker, less expensive and more efficient, but it plugs directly into the pressing needs of our troubled planet: providing a workable platform capable of meeting burgeoning housing needs across the globe.

We might not all end up with second homes with a pale view of the hills, but there might be a better chance of all of us having a home.

Find out more about Modulex 

Modulex Construction is the World’s largest Steel Modular Building Company. It was established by Red Ribbon to harness the full potential of these fast-evolving technologies and deliver at pace to meet the evolving needs of the community

Executive Overview

I’m acutely conscious that all across the globe we’re facing a dire shortage of domestic housing, and increasingly aware that existing housing policies no longer providing any of the answers. We need a paradigm shift to meet what could otherwise be a looming crisis.

That’s why I’m convinced modular construction will be so important: it delivers at the pace we need, working off low-cost platforms and with quality assurance levels conventional construction technologies simply can’t match.

Red Ribbon

At Red Ribbon we understand that the transition towards a resilient global economy will be led by well-governed businesses in mainstream markets, striving to reduce the environmental impact of their production processes on society at large and on the environment as well.

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