Lending policies on the horizon for Modular Homes

Speaking to Development Finance Today,  Robert Orr, managing director of development finance at Paragon, evaluates how the division is progressing and what challenges smaller developers may face this year.

You recently announced that new development lending at Paragon increased fourfold. Do you expect this to become a more prominent part of your commercial division?

Yes, there’s excellent potential for growth. Bringing Titlestone into the Paragon fold means we’ve been able to broaden our proposition and extend our offer to developers across all of England and Wales.

Developers working with Paragon can now access loans of up to £35m, with a maximum loan-to-GDV of 70%. Not many banks offer beyond 60% GDV — so that’s a significant uplift.

We’ve also added finance for pre-planning and purpose-built student developments into the range, extending support to SME developers earlier in the project lifecycle and reaching out to those delivering housing in specialist markets.

How challenging was the process of integrating Titlestone under the Paragon umbrella?

Integration has been relatively straightforward, with a focus on bringing customers the best from both organisations.

Titlestone brings a strong reputation for development expertise and Paragon brings long-term backing built upon its 30-year history as a specialist lender.

Quoted on the London Stock Exchange and a constituent of the FTSE 250, Paragon today has over £6bn in savings deposits. Building out from its traditional, stronghold in buy-to-let lending, Paragon is adding capability in targeted, commercial lending markets.

What do you think will be the biggest challenges for the development market this year?

Steering a steady course through the Brexit uncertainty will be front of mind for everyone as we head into autumn.

There are also some challenges ahead for smaller developers in terms of how they adapt to new environmental standards and integrate modular building technology into their plans.

The quality of modular homes has come on in leaps and bounds over the past few years and we’re looking at how we can develop our lending policies to satisfy developers opting for this route.

How did you get into the industry?

After studying accountancy and economics, I decided on a career in banking. Initially, I gained experience across a wide range of different sectors, but development finance really grabbed my interest and I’ve been a specialist in this area now for nearly 25 years — working for NatWest, Close Brothers and Titlestone before arriving at Paragon.

What I love about the job is the long-term relationships that you build with developers.

It’s very rewarding to support developers as they breathe new life into a derelict building or reinvigorate a disused site. The energy generated in delivering the end product is contagious.

If you weren’t in the industry, what would you be doing?

In my dream life, I’d be a professional golfer, leading the field at the Masters. More realistically, I’d like to be involved in business education and coaching. I did a stint as a corporate tutor in the mid-90s, training relationship managers out in the field. I’ve also been involved in delivering training courses for the Institute of Banking and always find it rewarding to see young people develop their skills and move forward in their career.

Source: Development Finanace Today

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Heating bills going down the drain? Here’s a way to bring them back

Water heating accounts for approximately 20 to 30 percent of household energy demand.  Much of the energy is expended warming the water coming into the shower and other areas of the house. By transferring some of the heat from the drain water to the incoming water through a heat exchanger, reduced energy is required. A significant portion of the heat from the drainwater is efficiently transferred to the incoming water with no energy use. By reducing the demand on the water heater, this also allows for increased capacity of the tank. 

This is achieved by a variety of systems called Drain Water Heat Recovery (DWHR). As warm water flows from your shower down the waste drain on its way to sewer, the DWHR device uses heat exchange to transfer the heat to an incoming flow of cold water headed towards the water heater.

These systems generally work on tank water heaters as well as on-demand ones. They are particularly popular in Canada and northern areas of the United States where the ground water is very cold.

DWHR systems are gaining in popularity because water heating uses so much of the household energy.  According to Canada Mortgage and Housing Corporation (cmhc.ca ). “Although this technology adds to the capital cost of construction projects, the energy savings over the life of the building help make it an ideal application for affordable housing projects.” Since the cost can be recouped in a short amount of time, it would seem logical that all houses be equipped with this type of system. These systems have no moving parts, a long life, and require minimal maintenance.

All DWHR systems can be easily installed by any licensed plumber or experienced handyperson. It is easiest to install these systems when the house is being built but they can be installed on remodels. Because they save so much on energy they add value to the home which is always a plus when selling the house. For those seeking LEED for Homes certification, they can achieve points for these systems under the efficient hot water equipment credits. DWHR systems are currently being installed in Passive Houses, where keeping energy to a minimum is a major factor. 

There are several systems currently on the market that recover heat from household water. Both of the systems mentioned here can be installed at specific shower locations or at the bottom of the home’s main drain stack, where it can recycle the energy from all the showers in the floors above.

The two most popular systems in North America are the EcoDrain™ and Power-Pipe® by RenewABILITY Energy Inc., which both feature patent-pending technologies.

The typical DWHR device will range from 32 inches in length up to 72 inches. Longer units provide higher rates of heat recovery, but be sure to look at rated performance to compare different models or brands. Natural Resources Canada has a website that allows just such a comparison.

Various places around North America such as Ontario and Manitoba, Canada require these systems be installed in new homes.These systems can be used to achieve building energy requirements or credits in the State of Washington, the State of California, and some parts of British Columbia. And there are rebate programs in other jurisdictions. They are currently being used in single family homes but are beginning to be used in multi-family units to cut energy costs.

I discovered these systems in various houses I have written about over the years and believe it is a simple and practical way of saving energy, preserving the water heating system and expanding the hot water availability in the home.

by Sheri Koones

Source: Forbes Now
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CHOOSING THE RIGHT INSULATION FOR OFF-SITE CONSTRUCTION IS VITAL

By James Mills, Product Manager at ROCKWOOL

 

ROCKWOOL, the world’s largest producer of non-combustible stone wool insulation, has introduced two new ranges dedicated to timber and steel frame construction applications Timber Frame Slab and Steel Frame Slab are specifically designed to help developers take advantage of the many performance characteristics associated with ROCKWOOL, providing a safe, quick-to-install and sustainable insulation solution that’s perfect for off-site and on-site construction.

ROCKWOOL stone wool insulation stands out for four key reasons:

Non-combustible

ROCKWOOL Frame Slab insulation is a Euroclass A1 Fire Rated (non-combustible) product. This ensures guaranteed fire safety performance both during construction and when properties are occupied. The Euroclass system classifies the Reaction to Fire performance of building products in accordance with BS EN 13501-1 and requires that they undergo testing for a range of characteristics including: ignitability, flame spread, heat release, smoke production and propensity for producing flaming droplets/particles. The Euroclass system is accepted in the UK and by all European Union States (and is mandatory where there is a Harmonised Product Standard). It includes seven classification levels, A1, A2, B, C, D, E and F, plus one rating (NPD), that sits alongside but outside these ratings. A1 is the highest performance level and F the lowest. Products classified A1 or A2 are considered non-combustible* and those classified B, C, D, E or F combustible.

ROCKWOOL stone wool can withstand temperatures above 1000°C and the Timber Frame Slab achieves the highest rating from the Structural Timber Association of Type FI Build 3, which means it maintains volume and does not combust. It can also help housebuilders to reduce separating distances between properties on a development to maximise space utilisation on a site.

Installation and Fit

Trying to fit insulation into awkward spaces can take up unnecessary time and lead to a poor fit. ROCKWOOL Frame Slabs are an engineered density product designed to provide a tight friction fit which minimises waste as well as speeding up the installation process.

Once installed, ROCKWOOL Timber Frame Slab, will hold its shape, ensuring that the insulation always performs to specification for the lifetime of the property. This product range is also lightweight, making it more efficient to transport and easier to handle on-site. Available in widths specifically to fit into framed constructions to reduce the need for cutting – 600mm for steel frame and 570mm for timber – the slabs will friction fit into standard 600mm frames with no gaps.

 Sustainability

Stone wool insulation is created from volcanic rock – a natural material in abundant supply, which is both recyclable and durable. This material is continually replenished naturally from within the earth – volcanoes and plate tectonics produce 38,000 times more stone material every year than is used to make ROCKWOOL Frame Slab products. As it is manufactured from stone, any waste can be collected and recycled by ROCKWOOL, then transformed into new products. This off-sets the cost of landfill and helps off-site housebuilders enhance their sustainability credentials. In fact, 100% of ROCKWOOL production waste is recycled and ROCKWOOL products themselves are 97% recyclable.

Thermal Performance

ROCKWOOL Timber and Steel Frame Slabs have been designed to provide the best of all worlds, moving beyond insulation products that address only the thermal requirements of a building. Both products are produced using new high-speed spinning techniques to provide a low lambda as well as a low product weight, enabling builders to achieve U-values while benefiting from insulation slabs that are easy to handle and install.

ROCKWOOL has designed the range to offer enhanced thermal performance of 0.034 w/mK at optimal density which can meet or exceed the requirements (thermal) of Part L of the Building Regulations.

And the benefits don’t end there….

In addition to the four points examined, ROCKWOOL frame slabs, feature a dense, non-directional fibre structure, which also provides excellent sound insulation performance. Effectively trapping sound waves and dampening vibration, reducing external noise as well as acoustic intrusion from between rooms within the same property as well as from outside.

The new range is also water repellent and vapour permeable. This helps the home to breathe, countering moisture uptake issues that can be an issue with timber and steel frame buildings. Using ROCKWOOL Timber Frame Slab reduces the risk of condensation and mould, allowing moisture to escape to outside without damaging the fabric of the home.

For more information on the Timber and Steel Frame Slabs along with insights into the full range of ROCKWOOL non-combustible solutions for frame housing, visit www.rockwoool.co.uk.

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THE 7 STAGES OF MMC H+H Celcon asks Does Aircrete have a future with MMC?

Delivering those 300,000 homes per year is a challenge and attention is very focused right now on Modern Methods of Construction. But what does MMC actually mean?

It’s an important question as much government money (for example, through the Homes Building Fund or Affordable Homes Programme) is aimed at encouraging the development of MMC solutions.

Which is all fine as long as we are clear about what is an MMC solution.

The MHCLG has commissioned Mark Farmer (as in, Modernise or Die) to look at the issue and suggest some ways of dealing with what is becoming a politically charged terminology.

Very sensibly, his report focuses on the desired outcome: more high-quality new homes, faster, and includes a range of approaches to reach that objective.

It suggests seven categories of MMC, from improvements in site practice at level seven to full-scale modular construction at level one.  

By using a stepped approach, this encourages all organisations to identify ways to improve their current building practice and to “move up” the levels in time.

So far, so good. As aircrete manufacturers, we are very comfortable with this as a number of our technical solutions will fit happily within the “seven stages” of MMC, allowing developers to take advantage of time and labour savings while also retaining the robust, durable performance advantages of aircrete.

Second on the agenda is acceptance. As Kit Malthouse pointed out in a recent talk at Housing 2019, we have been here before in terms of developing offsite solutions, and the industry – just as importantly, the mortgage and finance industry that supports it – is nervous.  Nervous of using new methods without guarantees of durability and robust warranties.

Where warranties are concerned, we need robust warranties that certify the whole building, not just the individual elements from which they are constructed, and we need a minimum life expectancy.

The Build Offsite Property Assurance Scheme (BOPAS), designed to deal specifically with non-traditional buildings, produces a certification that includes a 60-year design life expectation. Our own I-House solution was one of the first to achieve this accreditation and NHBC warranties are likely to follow suit.

And one further issue is the lifetime performance of MMC buildings. What happens in twenty years’ time when a homeowner wants to convert their loft or extend their kitchen? Who will know what the structural design of the property is or what alterations it is likely to be able to withstand?

Aircrete houses, with significant structural strength and well-understood performance, are ripe for this type of alteration. And they need to be – according to research by Savills the average house buyer will now live in their home for 23 years.

The proposed solution is a central register, a database of how all housing stock is built, linked to standard definitions and certification status. This logical solution does pose some pretty big questions, however. Such as who is going to collect, store and pay for this data? And who is going to persuade the builders to share their intellectual property?

Aside from these practical considerations, it is hard to ignore the need to embrace new methods and at H+H we’re well up for that.
Aircrete as a material may not have changed much in the 50 years since it was developed, but methods of building with it have definitely moved on. We would be delighted to see our Thin-Joint and Celcon Elements adopted more widely and are pleased to see a growing UK interest in these modern building methods – already tried, tested and trusted across Europe.

Does aircrete have a future? You bet it does. A long, long future.

 

H + H Celcon

 

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Pre-fab flats to land on Bristol Nightclub

The ready-made flats will be brought up from Southampton to Bristol by lorry then craned into place

Park Street is set to be closed for three nights next month when a number of pre-built flats are craned into an old nightclub.

Bristol developer Urban Creation has applied to Bristol City Council to close the road while it transports a number of apartments into the empty building at 50 Park Street.

The nine apartments, which were built in Southampton and are already decorated with bathrooms and kitchens, will be craned overnight from 11 to 13 August.

The flats will be lifted through the open roof of the stripped-out building and placed on top of one another.

A team of builders has already stabilised the property with a steel structure ready for the lift-in.

It is believed to be the first time in the UK that homes have been specially made to fit into an empty, existing property.

Jonathan Brecknell, director at Urban Creation, said: “We’re very excited to be taking modular construction to a new level, using a highly innovative approach that could have huge implications for home building in the UK.”

When Urban Creation bought the building last year it was empty and in a dilapidated condition.

The property was built in the 1950s after the previous building was bombed during the Second World War.

“Modular construction has been used widely for new builds, often on greenfield sites, Urban Creation’s approach shows what’s possible in tight urban sites, which could help meet the need for homes,” added Jonathan.

Modular construction company Go Modular, which built the ready-to-go homes, has teamed up with Urban Creation on the project.

The homes at 50 Park Street will be let out to students.

 

Source: Bristol Live

 

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XL joinery – caring for the Amazon

As part of its ongoing carbon neutral accreditation, XL Joinery, the market-leading supplier of doors and associated products, is supporting a variety of initiatives overseas, which will aid both the planet, as well as the local workers.

The first scheme receiving support from the leading door supplier, titled the Portel-Para Deforestation Project, prevents the loss of native forests in the Amazon. With plans to avert over 22 million tonnes of carbon emissions over the next 40 years, the initiative also employs and trains local villagers to monitor and conserve the timber reserves. This means that the scheme not only enables the deforestation project to be closely monitored but also provides work for the local residents.

Another contribution XL Joinery support is to the Mariposas Hydroelectric Power Project in Chile’s Talca province. This organisation recycles dirty water to generate electricity, replacing traditional coal or gas. Once again offering a skill and employment to local people with hefty annual CO2 emission reductions.

In addition to the overseas projects, XL Joinery is continuing to instil carbon footprint-reducing schemes closer to home. In its warehouse, 550 skylights are being replaced to provide natural daylight, as well as transitioning to electric vehicles on the warehouse floor. Other energy-saving measures are taking place throughout XL’s headquarters in a bid to reduce its carbon footprint, from production to delivery.

David Crossley, Continuous Improvement Manager at XL Joinery, commented: “We are so proud to be supporting these schemes that not only benefit the environment but also people living in smaller communities. As a committed organisation, we hold sustainability at the forefront of our business and we will continue to pave the way for sustainable business practices in the future.” 

 

For more information about XL Joinery, please visit: www.xljoinery.co.uk

 

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What Now Boris ?

A new prime minister in Number 10 means a new political administration with opportunities as well as concerns for the construction sector, says ACE’s Julian Francis.

With Boris Johnson about to enter Downing Street as the 55th person to become the country’s prime minister, we must all prepare for the reality of a new administration headed by a man that has been called both the Heineken politician for his ability to reach part of the electorate others can’t as well as the Marmite candidate, as you either love him or hate him.

Depending on your views of Boris Johnson, you may well see his ascent as either a new dawn or an unmitigated disaster for the country, but either way he is now a new reality, which we as an industry must prepare engage with.

ACE will, therefore, be making the case for the investment in the UKs social and economic infrastructure with as much vigour as we have always done, as we see this new administration as one with opportunities for our industry as well as some concerns.

High on our agenda will be calling on the government to commitment to infrastructure delivery by ensuring that a National Infrastructure Strategy is published in the autumn. This would allow for a long-term strategic approach that enables infrastructure to deliver the best possible outcomes to the economy and society more widely. This long-term pipeline would provide our industry with the confidence it needs to continue to invest and develop our infrastructure networks. So far, Boris and his team have shown themselves as supporters of investment in infrastructure as a way to meet the UK’s economic needs.

That said, many may have concerns over past statements on Heathrow and HS2, but even here we have seen movement from our premier-in-waiting as he has now accepted that Heathrow must progress and has moved away from his harsh statements on HS2 by calling for a review of the project.

Alongside this, he has shown a great deal of enthusiasm for HS3/Northern Powerhouse Rail and east/west connectivity and there are signs that housing and property development are also likely to be high on the agenda with the new prime minister. We would hope that any new approach to property development would also embrace ACE’s place-making campaign.

Education investment will also be on the new government’s docket as we foresee a greater commitment to a new school building programme alongside an increased investment in our digital networks as a way of improving equality and productivity across the whole of the UK. We further envisage that the government will continue to pursue a carbon-neutral target and the corresponding investment in green energy production that has already been started by the May administration.

All of these issues have been part of recent ACE campaigns and we are confident that the new government will lead to considerable opportunities for our members, but everything will depend on how effectively the new prime minister is able to cut the political gordian knot that is Brexit. Now more than ever must our industry speak with one voice and ACE stands ready to do its part.

Julian Francis is the director of policy and external affairs at the Association for Consultancy and Engineering.

Source: Infracstructure Intelligence

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Proposal for the UK’s first mini modular nuclear power station

The government is proposing to invest up to £18 million to help develop what will be the first mini nuclear power station in the UK.

The funding for small and advanced modular reactors will be less expensive to build that traditional nuclear plants – they will be designed so much of the plant can be built in a factor and transported to site for construction.

The news comes as a consortium led by Rolls-Royce has proposed a joint investment of more than £500 million on designing a first-of-a-kind small modular reactor (SMR), with a working model expected to be up and running in the early 2030s.

The project is expected to create 40,000 jobs at its peak, with each power station producing enough clean energy to power 750,000 homes.

The government funding, expected to be awarded in early Autumn 2019, is subject to a final decision to invest.

The announcement has been made as part of government proposals to explore a new financing model, the Regulated Asset Base (RAB) approach, to attract significant private investment for future nuclear power in the UK.

BEIS says the alternative model – already used in major infrastructure projects like the Thames Tideway Tunnel – could reduce the cost of financing infrastructure and risk for developers while limiting the impact on consumer bills in the long term.

It is seeking views from stakeholders and interested parties – until 14th October 2019 – on how a Nuclear RAB model could be implemented within the current energy system in a way that allows new nuclear to be built at low cost to consumers.

Business and Energy Secretary Greg Clark said: “A critically important step in reaching net zero emissions will be transforming the energy system so the economy can be powered by affordable, secure and clean energy. We will need to change not just the way we use energy in our homes and businesses but also how it is produced and delivered. We need to do this in a way that keeps the cost of energy as low as possible and ensures our energy security is never compromised.

“Through our modern Industrial Strategy we are building on our international leadership in clean growth to invest and develop the technologies and funding models we will need to reach net zero emissions.

“This new funding model has the potential to help UK industry seize the global challenge of the low carbon transition by building the infrastructure we need, while offering value for money for consumers and taxpayers.”

The government is also providing up to £40 million through the Advanced Modular Reactor (AMR) programme and is currently considering project bids.

Up to £5 million will be provided to the Office for Nuclear Regulation and the Environment Agency to build readiness for SMRs and AMRs.

 

Source: Energy Live

 

 

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The house of the future, with the speed of MMC

What does it take to be net-zero in the desert in a decade? Joseph Wheeler, AIA, co-director of Virginia Tech’s Center for Design Research shares his team’s design, which placed first out of 60 entries with its modular construction technique and superior performance in the 2018 Solar Decathlon.

 

 

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SURVEY SHOWS TIMBER SPECIFICATION INCREASE

There has been a definite increase in the specification of timber as a construction material in the UK, according to a recent survey conducted by Södra Wood

63% of respondents say they believe timber is growing in popularity as a construction material.

 

The survey generated insight from almost 350 architects, consultants, contractors and merchants. The objective was to ascertain whether the UK is beginning to recognise the merits of timber and the results were clear to see:

  • 69% of those questioned said they already worked with it;
  • 68.75% of respondents felt that timber can help meet government housebuilding and sustainability targets.

When asked to rank the benefits of timber as a construction material in order of importance, sustainability took the lead, followed by the fact that it is a quick and efficient material to work with. Great aesthetics took third place, then versatility, cost-effectiveness and offsite capabilities.

Nigel Buckley-Ryan, sales director of merchants, at Södra Wood, said: “As a timber business, we have been working hard to position the benefits of what wood can do for our construction industry – it’s really rewarding to see so many people working with timber. We believe it can help meet many sustainability and housing targets in the UK, so I’m delighted to see recognition of that.

“Sustainability is something that we are very passionate about here at Södra, which is why for every tree we fell, we plant another three and operate according to a tree’s natural lifecycle. It is welcoming to see that the UK construction industry is becoming more conscious of timber’s excellent sustainability credentials.”

Jeremy English, sales director of manufacturing, at Södra Wood, added: “While timber’s popularity is clearly growing, there remains lots of opportunity for further development, especially in terms of timber’s offsite capabilities, and cost and time efficiencies.

“The interesting thing about this survey is that it also shows that work still remains to be done to raise awareness around timber’s benefits. We’ll certainly continue to build its case and, as always, endeavour to drive the industry forward.”

 

Sourcs: PBC Today

 

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