The offsite housing construction market looks ready to rebound following a volatile period that has seen a shakeout of modular home building firms. A cautiously upbeat forecast by construction data experts Barbour ABI predicts the market is expected to reach £800m by 2029 — up from £672m in 2025. This represents an average annual growth of 4.46% from 2025 to 2029.
The main driver is the Government’s commitment to MMC in delivering affordable homes as part of a £39bn commitment to social housing. The Government’s target was to have at least 25% of new affordable homes built under the Affordable Homes Programme’s strategic partnerships, to be built using MMC, by the end of 2025. However, some social housing providers are already reported to be near 40% MMC.
Researchers found that the MMC market (including volumetric solutions and systemized solutions, alongside bathroom/kitchen PODS and other pre-manufactured structural elements) was one of the fastest construction sectors to recover post-COVID, thanks to controlled factory conditions and reduction of labour required onsite.
However, market slowdown began disrupting nascent volumetric manufacturers like TopHat LTD and ILKE Homes after 2022, generating negativity around the future use of offsite.
“After a difficult period for the sector, we think there is potential for a new growth cycle for offsite housebuilding,” said Ed Griffiths, Head of Business and Client Analytics at Barbour. “Housing policy remains focused on accelerating delivery, with targets for MMC and social housing creating a clear pathway for the sector.
“For that reason, the offsite housing system market is definitely one to watch in the next few years. That view is underpinned by the urgent need to address the UK’s acute housing shortage as the population grows. The skills gap also persists and offsite offers a clear solution that will be harder to ignore as higher local housing targets are implemented by Labour.”
Barbour researchers also noted that non-housing demand is a stabiliser for the MMC sector with increased uptake in commercial, healthcare and education providing an outlet for companies during the housing downturn. This resilience will make the sector increasingly appealing to investors going forward.
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