Prefab factory starts churning out affordable homes for young adults

Most insurance companies want to protect your home. The UK firm Legal & General would also like to build it for you as well.

Earlier this month, according the The Guardian, the insurance giant began production of its new line of prefabricated homes at its factory in Leeds in northern England, which it plans to ship to building sites across the country on trucks.

These homes aim to fill a key gap in the UK market, addressing a need that’s also pressing in the United States: affordable housing for young, single urban workers. The first development utilizing the new homes, in Richmond, located in southwest London, will purchase hundreds of units from L&G. They’ll be rented out for £600 to £700 ($785 to $915) a month, well below the cost of renting a current one-bedroom apartment in the area, which starts at roughly £1,000 a month ($1,307).

Can this type of construction help create affordable housing for the millennial workforce? Other companies see similar potential in this technology: Google just ordered 300 units of prefab housing from a new Bay Area startup, Factory OS, earlier this year, hoping to provide affordable accommodations for its workforce in one of the most expensive real estate markets in the country. Along with coliving startups such as WeLive, these prefab companies believe industrial manufacturing techniques and new business models can solve the affordability crisis for young workers.

Legal & General

The “turn-key” homes arrive on site nearly complete, with kitchen, carpet, curtains, a bathroom, and even furniture already built in. The company estimates that factory production and efficiency saves builders 15 percent off normal construction costs. And this is just the beginning. The 550,000 square-foot Leeds factory will be able to turn around 3,500 homes a year via eight separate production lines.

There 26-square-meter (280 square feet) homes certainly boast significant amenities, including underfloor heating, a smart door system for remote entry, and solar panels that promise to cut total energy bills to as little as $13 annually. But the extremely tight squeeze has raised fears of downsizing and “racing to the bottom” as far as home sizes go, and the new models technically don’t meeting national space standards governing the minimum size of units (the development director has been clear they don’t expect families to fit into such a dwelling).

Animation via L&G Homes

The UK currently faces a housing shortage, exacerbated by a lack of skilled constructions workers, so Legal & General’s entry into the prefab housing market isn’t as much of a left-field move as it might seem.

Legal & General will also build a series of larger, two-story homes for the development meant for families, which measure 82 square meters (882 square feet). The development is expected to rent out beginning in 2018 (as long as it receives official planning permission.