Panelized and Modular Building Systems

¶ … panelized and modular building systems is less common in the UK than abroad and the potential for this to provide a solution for future needs

Housing shortage after the Second World War, rising of housing demand and increase in the defective traditional houses prompt the UK government to adopt sustainable housing development. The major government aim is to improve the method the housing are being built in the UK to address the housing shortage and enhance cost effectiveness within the housing production. Additionally, the changing in the market forces for housing coupled with the planning policy is forcing the house-building industry to reconsider the approach they employ to build houses in the UK. More importantly, population increase in the UK within the last few decades coupled with the concern to improve the housing performances, have necessitated the need to employ Modern Method of Construction (MMC). (Pan, Gibb & Dainty 2005). Modern Methods of Construction is a range of technologies, which involves building houses with off-site assembly and/or prefabrication in a lesser time. (the Commission for Architecture and the Built Environment, 2005).

MMC is a kind of innovative system in the construction sector that allows house-builders to build houses with factory pre-fabricated materials at lesser time. Despite the sustainable method that the off-site technologies have introduced into the UK housing construction, the current level of housing production using offsite-MMC is generally low. (Pan, Gibb & Dainty 2005). In the UK, many homes are still being built using traditional brick and block system. National House Building estimates that only 10% of house builders are using panelized and modular building system to build houses. In other countries such as Japan, 40% of new housing is being built using MMC technique. In the Scandinavia countries, German and Japan, there is a much greater use of MMC for house building than the UK.

Fundamental aim of this study is to facilitate the industry and academic understanding on the concept and the use of panelized and modular building systems, and explore the fundamental factors leading to the low use of panelized and modular building system in the UK. To achieve the research aim, the study formulates the research objective to enhance greater understanding on the low use of MMC in the UK compared to other countries.

1.1: Research Objective

To investigate the factors leading to the low use of panelized and modular building system in the UK than other countries.

To provide potential solution for the increase in the use panelized and modular building system for housing building.

1.2: Research Questions

What are the leading factors for the low use of the panelized and modular building system in the UK compared to other countries?

Which countries have a higher use of the panelized and modular building system and the reasons for its higher use?

This study collects both primary and secondary research to answer the research questions and address the research objectives. By doing so, the study gains insight into the factors leading to the low use of panelized and modular building system in the UK. This research contributes to the body of MMC knowledge by identifying countries with higher use of MMC and major factors leading to its higher use than the UK.

1.3: Research Problem

"The UK house-building industry has often been criticized for failing to meet the housing needs of the country. The traditional craft-based build process is labor intensive with a long lead-time and is difficult to control for product quality. It is also not suitable for configurable designs that would help to customize the home, and the industry has been criticized for excessive standardization of its products. Attempts at industrialization, usually employing frame or panel-based build methods seen in many countries, have failed due mainly to lack of clear objectives. A change in build technology is also only one step in addressing the concerns of poor quality and lack of product variety." (Roy, Brown, Gaze, 2003 P. 137).

The impetus of using the offsite technologies for house building in the UK started after the First World War when the traditional house building could not meet the housing demand and there was a shortage of skilled labor within the house building construction sector. Few decades later, the success of pre-fabricated housing was questioned over the quality issues making the traditional housing dominating the housing markets. However, within the last few decades, the off-site housing system has enjoyed a return of market acceptability where market attention has focused on the prefabricated house building system. Despite the increase in the trend of offsite house-building system, the traditional housing still dominates the housing market in the UK making the current usage of offsite apartments to be low. The major driver leading to the low usage of offsite-MMC flats has been attributed to the high cost materials used to build off-site housing units. (Pan, Gibb & Dainty 2005). Factor leading to the comparative lower use of the off-site technologies for building houses in the UK compared to other countries generates research problem, which the study attempts to address. While there are number of studies that have explored the MMC in the UK in general, there are still scanty of studies that have explored the reason leading to the lower use of panelized and modular building systems in the UK construction industry compared to other countries. This studies attempts to fill this gap, and provides a comprehensive research on the factors leading to the lower use of panelized and modular building systems in the UK and recommends the strategy to increase the use of offsite technologies for house building in the UK.

1.4: Organization of the Study

The research is structured in six chapters:

Chapter 1 provides the introduction, the research objectives, research questions, and the research problems, the method the study is organized, theoretical lens and the research contributions.

Chapter 2 explores the literature review that attempts to answer the research question and achieve research objective. The study reviews the past studies to enhance greater understanding on the factor leading to the low use of panelized and modular building system in the UK compared to other countries. The study also reviews the literatures to access the attitudes of construction companies, Lenders, government, and Insurance companies to panelized and modular building system in the UK. Finally, the literatures are reviewed to investigate and identify the countries that have a higher use of panelized and modular building system, and the reason leading to its higher usage.

Chapter 3 provides the research methodology that reveals the method of data collection. Chapter 4 reveals the data analysis.

Chapter 5 provides the findings.

Chapter 6 provides the conclusion and recommendations.

1.5: Theoretical Lens

The study employs economic theory of supply and demand in explaining the general housing demand and supply in the UK. Wilson, (2010) argues that the housing supply is not keeping with the housing demand in the UK. At present, there are almost 1.8 million registered households in the UK leading to the "overcrowding in the private and social housing stocks." (P 1). With the shortage of housing units in the UK, the government estimates that there is a need for 240,000 additional homes by 2016.

1.6: Research Contribution

This study enhances the greater understanding of the UK construction industry on the technique to produce precast-MMC houses at lower costs.

The study also contributes to the body of knowledge on the factors leading to the low use of panelized and modular system for house building in the UK compared to other countries.

The study enhances the understanding of the academic community on the factors leading to the low use of panelized and modular system for house building in the UK.

The study also enhances the understanding of policy makers on the overall barrier facing the UK construction industry in the production of precast-MM C. housing and the strategy to increase its production.

CHAPTER 2: LITERATURE REVIEW

To build a necessary framework leading to the factor leading to the lower use of panelized and modular building system in the UK compared to other countries, the chapter reviews relevant MMC literatures. First, the study examines the overview of the panelized and modular building system in the UK. Second, the literature is reviewed to enhance greater understanding the factors leading to the low use of panelized modular building system in the UK. Third, a review of literature is done to enhance greater understanding on the attitudes of construction companies, lenders, and government and insurance companies towards the panelized and modular building system in the UK. Finally, this chapter reviews literatures to identify the countries having the higher use of panelized and modular building system. This chapter synthesizes the current body of knowledge on the panelized and modular building system in the UK.

2.1: Overview of Panelized and Modular Off-Site System

Modern Method of Construction (MMC) involves the use of housing parts offsite which are specially designed in a factory. The two major products of MMC:

2.1.1: Panelized Products

Panelized products comprise of the ready-made walls, roof and floor and the panels are transported to the building site to be assembled. The panels could also be assembled quickly often within a day. Some panels have an in-built wiring in them making the housing construction to be faster. The panelized off-site building technologies could also involve exterior wall of building designed to provide the load bearing structural support, and the panelized building system could be made of light gauge steel, timber, structural insulated panels (SIPs), non-structural or concrete, which could be used to create the whole building.

(Parliamentary Office of Science and Technology, 2003). On the hand, Burwood and Jess (2005) reveal another method of panelized building system which is closed system. However, closed system is more complex because it involves the use of more factory fabrication such as insulation and lining materials. Different type of panels may include steel frame or timber frame and they may consist of prefabricated load bearing panels.

There are several advantages that could be derived from using panelized system for house building:

First, the panellized offsite building system offers labor saving since the panels is already manufactured in the factory.

Additionally, there is a great reduction in the construction time and provide the lesser wastage of building materials. Builders claim that a watertight home could be assembled and completed within 3 to 4 days, and the home could be occupied within 60 to 90 days. More importantly, a group of construction workers with a trained supervisor could assemble a panelized home, and the system does not require much shipping clearance. Ely (2006) argues that panelized system is pre-insulated and highly quality controlled within the factory.

Fig 1: Labor Saving using Panelized and Modular Building System

Source: National Audit Office (2005)

Illustration in Fig 1 shows that labor saving could be greatly reduced using modular system to build a house. Addition, labor is saved using panelized system compared to the traditional brick and block system.

Despite the benefits derived from using the panelized offsite building system, the system is not as efficient as modular system. Moreover, the system needs a high level of finishing on site, and there is a need to have a high volume of space to use this system for home building. (Ely, 2006).

2.1.2: Modular System

Modular offsite building technology is a form of building structure that can be pieced up together to make a flat. The modular is often frequently used for kitchens and bathroom, and between 80 and 90% of modular homes are often constructed in the factory and transported to the site for final assembly. The "pre-fabricated modules are often referred as pods" (Burwood and Jess 2005 P1) and the pods could be finished in the factory and completed with the mechanical and electrical wiring. The pods could also be constructed using light-steel frame, timber frame, concrete super structure and hot rolled steel frame. (Burwood and Jess 2005).

There are benefits that modular system offers to the housing building construction industry. First, the modular building system could be designed with the aid of a computer-aided design making the final design to be transferred to the factory floor. The system also provides the benefits of fully finishing in term of internal finishing, and there is a high degree of quality control within the factory.

The system also allows for better efficiencies and improved economic of scales within the house building sector. Moreover, the modular systems offer better construction standard since the walls are designed to enhance energy efficiency. More importantly, walls built with modular system are stronger than the traditional brick and block, and modular materials could be used to construct temporary homes since building could be taken apart and reconstructed at another location. A builder could use lesser time in building a home using modular system and wastage of construction materials is high minimized.

National Audit Office (2005) also argue that labor use could drastically reduced using panelized and modular system for home building, and it is possible to build four times of homes using the same on-site labor. The decline in the on-site labor has made the labor costs to be reduced when using the off-site technologies building a home. From the author' perspective, panelized and modular building system improves business efficiency and offer quality and customer satisfaction. The major factor making the system to use less labor is that significant part of the work is already undertaken in the factory Additionally, both system offers reduction in the time used to build a home. For example, a builder could use 16 weeks to build a house using panelized and modular system compared to traditional brick and block system which requires 39 weeks to build a house.

Despite the benefits derived from panelized and modular system for home building, the National Audit Office maintains that the overall costs of building a home using MMC technologies is higher than the traditional brick and block system. Typically, the cost of manufacturing components used for the off-site building materials make the costs to be higher, and some materials are not available within the UK. Some of the materials need to be imported from abroad.

Despite the increase in the overall costs of completing a house using panelized and modular system, the systems offer a high housing quality and durability compared to the traditional block and bricks. Typically, a home built using the light steel frame system could have the life span of 200 years. Thus, off-site system for home building meets durability, high performances and whole life costs requirements. Similarly, Parliamentary Office of Science and Technology (2003) reveals that MMC offers economic benefits because the MMC houses typically have fewer defects, and could be more energy efficient than the traditional brick and blocks houses.

Despite the benefits derived from using modular off-site technologies for home building, the shortcoming of the system is that a builder needs a clearance before shipping the modules to the site. Moreover, there is a little opportunity for homeowner to inspect the home on-site since the modules are fabricated at the factory. Since some of the materials used for its fabrication are imported, the system requires a higher degree of skilled installation on site. (Ely, 2006).

Meanwhile, it is important to understand the attitudes of the construction companies, lenders, insurance companies and government towards the panelized and modular technologies to enhance the greater understanding on the importance of panelized and modular building system in the UK.

2.2: Attitude of Government towards Panelized and Modular Building System

"The government is aware of the importance of developing a capable construction industry driven by technological developments in the manufacturing and service industry that is able to contribute in a large scale towards the economy of the sector" (Azman et al. 2010 P. 4478).

Since 1960, there has been a problem of the housing shortage in the UK due to the downward trend in the housing supply. At the same time, there has been a gradual increase in the number of households due to the increase in the immigration into the UK. With the increase in the influx of people into the UK, there is a forecast that the number of households in the UK will increase to 3.8 million between 1996 and 2021, which is equivalent of 150,000 increases yearly. Recent statistics reveals that the increase in the new households will be more than 150,000 formerly estimated and the new households could increase to 189,000 yearly. (Barker, 2003). Given the increase in the demand for housing in the UK, and the increase in public concern whether the traditional housing supply could meet the current demand for housing, the UK government set up the Baker review. (Barker 33 Cross Industry Group, 2006, Barker, 2004). Baker warned that the under-supply of the housing unit in the economy might constrain the economic growth and prosperity. Baker (2003) suggested that the offsite technologies could address the current housing shortage, the quality issues and skilled shortage in the construction industry.

The primary drivers for making the UK government to focus more attention on the off-site technologies for building homes is due to the shortage of housing in the UK. Typically, the housing demand in the UK exceeds the housing supply. The current supply of new housing in the UK is approximately 175,000 per year, which is not sufficient for the demand for housing in the UK. Typically, the demand for housing is on the average of 230,000 per year, and it is estimated that the housing demand is likely to increase to 3 million by 2016. In the South-East England, there is a shortage of affordable housing for key workers and the Treasury's Baker review warns the consequences the shortage of housing supply could bring to the economy. Typically, the UK government has played a key role in encouraging builders to build more housing using MMC. For example, the UK demonstrates the key interest to build approximately 200,000 houses by 2016 at Thames Gateway, Stansted-Cambridge Ashford and Milton Keynes in the UK.

Additionally, the UK government renewed interest on MMC is encouraging. From 2004, the housing corporation has focused its interest on the MMC policy by providing funding to build equivalent of 5,000 social housing units per year using MMC. In 2005, there was an agreement between the English Partnerships and the Housing Corporation to build 1.300 homes for key workers in the south East England using MMC. Kempton (2010) reveals that the UK Housing Corporation recently announces that it expects 25% of the houses being built by the registered social property owner to be built using modern method of construction.

Despite the government effort to encourage the use of off-site technologies for home building in the UK, the government efforts are limited. Private builders are building approximately 90% of the UK new houses. While the UK government has disbursed part-government fund of £1.5Million to improve off-site home building, nevertheless, the government has not yet provided the direct incentives for private builders to encourage them to build more houses using MMC technologies. Nadim et al. (2009) argue that while the UK government has embarked on the initiatives to encourage wider use of modern methods of construction to address the skilled labor shortage, however, the government has overlooked there is also an acute shortage of professional manual labor in the UK just like skilled labor. However, increase in the government focus on the off-site technologies has made the construction companies to intensify the effort to build houses using panelized and modular system.

2.3: Attitude of Construction Companies towards Panelized and Modular Building System

UK construction industry has long faced criticism due to their poor performances. Nadim, et al. (2009) argue that the construction industry has long faced criticism for their low performances and this has been attributed to the high level of wastage, fragmented nature of the construction industry and lack of research and development (R & D) within the industry. The poor image surrounding the construction industry has been inability of the industry to attract qualified graduate and skilled labor to the industry. Coupled with the government initiatives to encourage off-site panelized and modular housing system, the UK construction industry has realized that there is a need to improve the construction quality in the global market environment.

Azman et al. (2010) reveal that "the construction industry is highly aware of the need to improve the integration, planning and control of its mass quality production, open new economic global trend, achieving open construction system and developed the standardization of products in line with the global market." (P 4478).

To enhance the quality in the construction sector, the construction industry has made appropriate initiatives in making a paradigm shift to the manufacturing construction industry in order to adapt to the global business trends and achieve high standard in the construction sector. One of the major drivers that encourage construction industry to increase their focus on the off-site building system is the growth of Multinational Corporation in the international business environment, which has geared the internationalization of construction. (Nadim, Goulding 2009).

On the other hand, Na (2007) believes that the impetus for the demand of panelized and modular building system started after the First World War when there was a rapid demand for new houses in the UK, and the traditional brick and blocks approach could not provide sufficient housing needs. Coupled with lack of skilled labor, and the low production of traditional building method made the construction industry to embrace the innovative construction approach. It was after the Second World War that the UK construction industry increased the use of MMC for house building when there was an intensified pressure on government to provide jobs for returned soldiers fought during the WWII. However, the increase in the use of offsite construction technique by construction industry stakeholders was due to the innovation timber framing that occurred between 1927 and 1941. The timber was easy to form into panels, which enhanced the possibility of fabricating the accommodation or hotel units within the factory, and later assemble on site. The demand for faster construction coupled with the shortages of skilled craft-workers make the construction companies to embrace the modular and panelized construction technique. Despite the recent impetus in the use of innovative construction method, large and few construction companies still use the OSM technique for construction, and the use of the prefabricated and standardized technique is still concentrated in the urban centers. Rapid increase in the commercial activities has been attributed to the use of off-site construction technique and the construction companies have taken the advantages of the increase in the demand for offsite construction techniques.

"For example, McDonald's restaurants use prefabrication technology to build their new outlets. Recently they set a record of a completed outlet being built and opened for business within 13 hours of starting construction on a prepared building site. Currently, in the UK, offsite construction techniques have considerable commercial implications for businesses and a range of clients from hotels to retail outlets are using some forms of prefabricated procurement." (Na 2007 pp 22-23)

Despite the intensified effort of the construction sector on the off-site technology for home building, the UK off-site market was totaled £2.2 billion representing only 2.1% of the total value of the UK construction market which worth £106.8 billion. The great challenge facing the construction sector in the UK is the integration of the traditional brick and blocks system into the off-site technology. House buyers in the UK are still strongly influenced to the traditional brick and block styles, and these affect the implementation of the new concepts and the innovative technologies in the construction. (Azman et al. 2010) .

Pan, et al. (2007) contributes to the argument by pointing out that despite the government-increased effort to induce the use of off-site technology to improve performance within the construction sector; the UK construction industry is still reluctant to adopt the off-site technologies for house building. Pan et al. (2007) further point out that UK buyers are still strongly influenced by the poor quality of post-war prefab and the issue is still fresh in the mind of many buyers making construction companies to resist innovation in the house construction.

Additionally, "the human perception barrier, grounded in the historical failure of offsite practices, also exists among architects and other designers. This, coupled with technical difficulties (e.g. site specifics, logistics, interfacing problems), high costs (where economies of scale are not possible) and the fragmented structure of the supply chain inhibits designers' acceptance of offsite technologies." (Pan, et al. 2007 P. 184).

More importantly, within the housing sector, architects, developers, implementers and contractors play important role in the housing innovation due to their role in the decision making process in the house building. However, these stakeholders are facing barriers in the successful implementation of offsite technologies on the daily basis. The overall setback has made the offsite-MMC practice to be slow in the UK construction industry. Pan, Gibb, and Dainty (2008) argue that developers has been slow in adopting the innovative home building in the UK, many stakeholders within the industry are still concern about its effectiveness compared to the traditional brick and block system. The industry characteristics could well determine the attitudes and practices of house builders towards the offsite technologies. In the UK, there are currently 18,000 house-builders registered under the National House Building Council, however, only the small proportion of house-builders undertakes full range of house-building activities which involves buying a land to constructing a full fledge house. (Baker, 2003). Additionally, the housing market is not well stratified, there are only 200 firms producing up to 50 homes yearly. While some house-builders take the role of building houses, some builders only collaborated with suppliers and manufacturers. Moreover, some developers do not have the capacity to implement the entire construction process. The complication issues of the fragmenting nature within the industry inhibit the take-off practices of the offsite technologies. The investigation conducted by Pan, Gibb, and Dainty, (2008) on the use of offsite manufacture (OSM) reveal that half of 100 builders or developers and 200 social housing organizations have used the OSM for house building in the last ten years. However, the usage of OSM was only less than one-quarter of the completed building. While majority of the house builders claim to have used panelized construction system, however, less than one-fifth of developer use modular construction system. The public attitudes towards the used of panelized and modular houses has been the major setback for its lagging behind within the construction sector. A survey conducted by MORI in 2001 revealed that 69% of respondents still prefer traditional brick and block housing system. There is a stigmatized problem towards MMC because it is believed that the prefabricated housing is only for the social housing. (Roy, Brown, and Gaze, 2003).

However, recent report from AMA Research (2011) reveals that there is an increase in the use of modular system for bathroom and kitchen within the construction industry in the last few years. In the recent years, the UK prefabricated modular market has experienced a significant growth. Recent trends also reveal that the use of prefabricated modular system in the UK construction industry is increasingly where the fabricated construction technique has 10% cut in the construction market. Many clients from public and private sectors are demanding for the use of off-site construction system to reduce the construction time. While there is a recent increase in the use of off-site construction technologies, the use of the panelized system using timber frame for home building in the UK is higher than the use modular system. Within the UK construction sector, 22% of the new housing partly or wholly uses the panelized system for home building attributing to the 10.1% (£601 million) increase in the industry turnover. The UKTFA (2008) report reveals that approximately 51,700 pods commercial and housing units were built in 2006 making the timber frame housing system to record 8.1% growth in 2005 and11% growth in 2006 making the use of timber frame to rise to £542 million in 2006.

Despite the increase in the use of timber frame for the precast housing, the attitudes of lenders towards panelized and modular houses are still not encouraging giving the stricter conditions imposed on borrowers.

2.4: Attitude of Lender towards Panelized and Modular Building System

Recent economic downturn in the UK has affected the prospect of securing loan for the pre-cast house building. Goodie and Pan, (2010) argue that the UK has experience four consecutive economic downturns leading to the fall in the housing prices. "In the mid-1970s, the early 1980s, the early 1990s and recently from autumn 2007 to spring 2009"(P 16). The major factors leading to the economic downturn are mostly attributed to the macroeconomic fluctuations, tax and regulatory changes, interest rates fluctuation, and changes in the credit conditions. However, hosing builders have been hit by the recent economic downturn. With the recent economic downturn and low in the demand for precast housing, private lenders in the UK implements stricter lending condition before disbursing the funds to borrowers.

However, Gallent (2009) points out that there is a recent increase for loan approval for precast housing lending. However, the precast housing lending condition is still tight in the UK. The tight lending condition maintained by lenders in the UK is forcing some house-builders to focus on the most profitable housing and housing with high market demand. The author further argues that the negative attitude of lenders may lead to the decline in the access of mortgage credit, which may make buy-to-let market to shrink.

Office of Fair Trading (2008) also points out that the attitude of mortgage lenders towards the precast housing is not encouraging where many lenders implement tighter conditions and often demand large deposits from borrowers before the loans are approved. However, report from Home Building (2011) reveals that lenders do not set their lending criteria on the type of system used for the housing construction. Lenders in the UK give equal chance to borrowers intending to buy traditional houses or pre-cast housing. Patrick Sawdon of Halifax reveals

"Halifax takes the view that properly constructed timber frame housing with a suitable external cladding is equally as good as housing which is built in brick or block, and we make no differentiation in the lending terms offered on either form of construction." (Home Building, 2011 P. 3).

Additionally, the insurance companies do not generally discriminate between traditional housing and precast house building. The claim by the National House Building Council (NHBC) reveals

"Timber frame construction is recognized by the NHBC and Zurich Municipal for guarantee purposes. Steve Birt of the Association of British Insurers says, "Insurance companies generally draw no distinction between modern timber frame and brick and block construction." (Home Building, 2011 P. 3).

Generally, there is still low use of panelized and modular housing system in the UK compared to some countries in Europe, the literature is reviewed to identify the countries that have higher use of panelized and modular houses and the factors leading to the higher use.

3: Investigation and Identification of the countries having a higher use of these methods and why?

Research from Parliamentary Office of Science and Technology (2003) identifies Scandinavia countries, and Germany to be the countries having greater use of panelized and modular building system than other countries in Europe. Typically, countries such as Poland and Sweden have begun export their MMC products to the UK. Some of the major factors leading to the higher use of MMC in these countries are the extreme colder climate that is the features of these countries. Since, the activities are very low during the winter, and these countries only experience shorter good season, builders prefer to build houses using MMC since the use MMC allows quick construction. More importantly, the pre-cast building materials such as timbers are more readily available in these countries than other countries in Europe, thus, the use of MMC for housing construction is more cost effective in these countries due to the availability of abundant building materials. Additionally, there is a cultural preference housing styles in the Scandinavia because people prefer the use of timber frame to build houses and there is a greater traditional attachment to panelized or modular housing styles since faster housing construction allows earlier occupancy and reduces disruption to neighbors.

Jonsson (2009) also supports the argument of the Parliament Office by indicating that 33% of the multiple-story building in Sweden is built by the timber frame. Additionally, majority of the single-family houses in Sweden are built by the timber frame. Before 1994, the Swedish government only allowed builders to build timber load-bearing building by up to two storeys only because of the public skepticism that timber-bearing buildings are susceptible to fire. After 1994, after Sweden becomes a European Union (EU) member, Sweden is forced to comply with the EU building protocol and the Swedish government allows builders to construct unlimited timber structure. Presently, multi-stories house building built with the timber frame in Sweden is 33%. Typically, timber frame is used to construct multi-family dwelling of up top two storeys. Additionally, the production capacities of the Swedish timber construction companies are between 1,500 and 2,000 per year. (Jonsson, 2009).

The major factor leading to the higher use of pre-cast technologies for house building in Sweden is the lower construction costs of using prefabricated technique to build a house. The costs of a completed building using pre-cast technology are lower than the cost of traditional brick and block building. Typically, the future of pre-cast building system is bright in Sweden because architects and construction engineers are already familiar with the panelized and modular building method.

On the other hand, Venables, and Courtney (2004) point out that German is one of the countries in Europe with higher use of pre-cast technologies for home building. Between 1950s and 1960s, German house builders invested heavily in the modern method of construction making the industry to enjoy significant force in the German market. In 2002, Germany industry built over 23,000 prefabricated homes using timber frame, which is equivalent of 13% of all new semi-detached or detached home build within that year. However, in East Germany, the proportion of house built with the timber frame is more than the national average reaching up to 20%. With high production of pre-cast building in Germany, many OSM builders have started exporting the pre-cast homes to other European countries notably the UK, Austria, Switzerland, and many other European countries. In 2002, pre-cast home exportation account for 5%.

One of the major reasons for the high use of precast technology for home building is that "the German OSM industry has overcome an image of poor quality through developing rigorous quality standards and promoting certification schemes; a similar strategy would assist the UK OSM sector to address current public perceptions."( Venables, and Courtney 2004 P. 5). The OSM image has changed significantly in German. A recent survey conducted by a mortgage lender trying to ascertain the popularity of OSM in Germany reveals that:

20% of 63000 respondents lived in a pre-cast built home.

Almost all 63,000 respondents know a person living in factory built home.

82% of respondents are considering buying a factory built home.

92% of respondents are certain that factory built home could meet their specific requirements.

95% of respondents indicate that OSM technology is a sensible, practical and trustworthy way of building.

75% of respondents believe that OSM houses could be resold likewise traditional homes.

50% of respondents reveal that OSM is setting trends such as energy saving and efficiency and quality design.

German construction industry is able to achieve comparative market advantages in OSM building because the industry has focused on R&D and innovation to produce high quality homes.

However, Johnson (2009) indicates that the prefabricated housing system has dominated the significant percentage of housing market in Japan. While the UK construction industry is still struggling to achieve market advantages for OSM building,

"Japanese pre-fabricated MMC house manufacturers have maintained a consistent and influential position within the domestic house-building industry, helping to shape the evolution of the Japanese housing market since Daiwa House Industry released its first model, the prefabricated." (Johnson 2009 P1).

Typically, Japan produces average of 160,000 pre-fabricated home yearly which is nearly equivalent of entire 213, 372 home produced by the UK house building industry in 2006. Compared to the UK construction, which produced only 1% of precast home in 2006, Japan construction industry produced more than 14% of precast houses from the entire new house constructed in 2006. Japan construction industry has been able to sustainable market advantages for the precast homes because the industry has focused on "continued investment in efficient manufacturing and procurement techniques, research and development (R&D), and customer-orientated design, Japanese prefabricated housing manufacturers (hereafter, PHM) have developed sophisticated production and marketing processes to maintain their competitive position within the domestic housing market. It is therefore not surprising that the Japanese prefabricated housing sector has received particular attention from UK academics and industry experts as a potential measure upon which the future development and marketing of offsite MMC in the UK can be based." (Johnson 2009, P1).

4: Summary

The review of the literatures reveals that the UK government is making a significant effort to increase the use of panelized and modular system for home building to address the shortage of houses in the UK. Despite the government effort, the factory built home in the UK contributes to 2.1% of all the home produced. The major drivers for the low production of pre-cast houses in the UK are due to the high costs of pre-cast home production, lack of research and development to improve the innovative homes, and low attitude of buyers towards the factory built homes. Contrary to the UK, the construction industries in Sweden, German and Japan produce higher percentages of precast homes in the countries.

The study provides the research methodology to test the research and validate the secondary data. The next chapter reveals method of data collection and the step used for collecting data.

CHAPTER 4: RESEARCH METHODOLOGY

This chapter describes the procedure for data collection. The study uses internet survey as data collection method. The chapter discusses sample population, sampling procedure, and survey implementation procedures.

4.1: Data Collection

The data collection is very critical step in testing research, and the data collected in this study was used to answer the research questions. Data collected is used to answer the following research questions:

What are the leading factors for the low use of panelized and modular building system compared to other countries?

Which countries have higher use of panelized and modular building system and the reasons for its high use?

The methodology used to collect data is through combination of primary research, and secondary research. The methodology used to collect the primary data is internet survey. Due to the pre-occupation of sample population with their jobs, the internet survey for data collection is appropriate to make the sample population to respond at their convenient time and the system provides greatest response rate.

4.1: Data Collection Procedures

The study follows the Tailored Design Method for data collection (Dillman, 2000). This approach includes electronic email invitation to participate in the survey. The email invitation is followed by contacting each potential participant to ensure that they receive the email, and a verbal invitation to participate in the survey. If personal telephone contact is not established with a potential respondent, a researcher leaves a voice mail communicating the information. Dillman, (2000) argues that Tailored Design method is very critical for a researcher to follow, and a research should emphasize on the repeated contact with potential respondents to achieve high rate of returns. More importantly, special contact is more personal in nature because it improves high rate of response rate to the survey. To establish special contact, a researcher contacts respondents through telephone to highlight the importance of the survey and convince them that the survey invitation is not a spam. New knowledge gained from the telephone conversation enhances respondents commitment to fill the survey.

4.2: Sample Population

Sample population consists of house-builders in the UK, and approximately 400 house-builders were randomly selected. Additionally, the study selects top 100 house builders in the UK making 500 house builders selected as sample population. Data from the UK Government Statistics reveal that approximately 175,000 housing units were completed between 2001 and 2002 of which private house-builders contributed to 87%, which is approximately 153,500 housing units. Based on the data from the government, the top 100 builders sampled for the survey contributed 65% (113,882) of the total housing units built between 2001 and 2002. (Wellings 2003). The study targets house-builders for the survey because of their prevalence in the building of the precast housing units within the construction industry.

4.3: Survey Instrument

The study develops the survey instrument based on the comprehensive reviewing of relevant literatures and the knowledge gained on pre-fabricated housing in the UK, housing supply, and housing market in the UK and other countries outside the UK with higher use of precast technologies. The instrument is designed using Likert scales. (Oppenheim 1992). The survey comprises 3 major sections. Section 1 targets the overall views of house builder on prefabricated Offsite application with reference to their professional application. Section 2 identifies the barrier and driver leading to the low use of offsite technique for housing building in the UK.

Section 3 sought to diagnose offsite techniques used by builders and identify the appropriate strategy that the UK construction industry could employ to increase the house building construction output using off-site housing construction technique. The secondary data are used to supplement the primary data collected to achieve the research objective and answer the research questions.

4.4: Secondary Data

The study collects secondary data from wide variety of published information, and the collected data were reviewed to assess the factors leading to the low use of off-site technologies for home building in the UK compared to other countries such as Sweden, German, and Japan. The study has been able to identify Japan, German and Sweden as the countries having the high use of pre-fabricated houses. Moreover, the data is also collected to assess the attitudes of construction companies, government, lenders and insurance companies towards offsite technologies for building houses. The data are collected through academic research, government sources, journal articles, AMA Research knowledge bank, and company report. Data were specifically collected from the electronic database such as Science Direct, Emerald insight database and EBSCO database. These academic databases contain journal articles, research papers, and wide range of industry report. More importantly, the study collects data from the university library to collect data from academic books.

CHAPTER 5: DATA ANALYSIS

The study provides the data analysis for the validity of data. The research uses Trochim, and Donnelly (2007) procedure for the data analysis. Trochim et al. (2005) reveals that data analysis procedure involves logging the data and checking the data for accuracy before entering the data into the computer, and based on the author remark, this study employs the following procedure for data analysis.

Checking the Data for Accuracy: All the data collected through the internet survey are check for accuracy to clarify the errors identified in the survey. The following procedures are used for the accuracy of the data collected:

First, a researcher checks all data to confirm their readability and legibility.

Second, a researcher checks whether all questions or important questions are answered.

A researcher also checks whether the responses of respondents are complete.

Entering Data into the Computer: After verifying the data for accuracy and valid response are collected, a research enters the final data into the Microsoft Excel program to provide the visual and graphical representation of the findings.