Factory-made houses gain traction in Britain's turbulent real estate market as build quality, consumer satisfaction with standard construction declines

Lorena Madrigal

BANGOR, Maine , August 29, 2011 (Bangor Daily News) – Paul Crook’s new home in London’s commuter belt arrived on a truck from Germany, took eight days to assemble and cost $2 million.

Disillusioned with the British property market and local builders, the 53-year-old IBM executive and his wife ordered the four-bedroom house from Huf Haus, a company based about 60 miles northwest of Frankfurt. They moved in last month.

The standard of construction was “pretty awful on brand new houses on premium sites in the southeast of England,” Crook said by telephone. “So although they’re asking for a premium price, you’re not getting corresponding quality.”

Factory-made houses, popular for decades among Germans and Americans, are becoming more prevalent in Britain as homebuyers and developers try to avoid turbulence in the real-estate market. Sellers in London lowered asking prices by the most in a year in August as demand in Britain’s most expensive city was hit by turmoil in financial markets.

Loans to buyers of pre-made homes will more than double to $5.5 billion by 2014, according to London- based researcher Datamonitor. The rest of the mortgage market will likely grow by less than 25 percent, the firm said.

Facing a housing shortage of 1 million by 2015, the British government is encouraging Britons to build their own homes by freeing up more land, persuading banks to offer more financial products and easing planning restrictions.

About 14,500 homes will be self-built this year, according to forecasts by the National Self Build Association. That compares with 13,600 in 2010, based on figures from H.M. Revenue and Excise, which refunds self-builders’ value added tax for their material costs.

Around one in every 10 new homes in Britain are self built, the association said. That’s compared with about 28 percent in the U.S. with an average price of $243,600, according to census data for 2010.

The U.S. prefabricated housing market comprises mainly of two types of buildings: modular homes and manufactured ones.

The first are built in sections that are transported to the site by truck, while the second — formerly known as mobile homes or trailers — are built on a fixed steel chassis and transported on their own wheels.

Tim Virdee bought his English property in 2006 from Huf Haus, whose products range from town houses and apartment buildings to retirement homes and office blocks. The 47-year-old sales and marketing consultant flew to Germany to pick out exactly what he wanted for his new $1.6 million home.

“We knew the house would be built exactly to budget,” Virdee, 47, said of his glass-and-timber property about 45 miles south of London. “Talk to anyone who’s constructed their own home and they’ll tell you horror stories.”

British homebuilders like Persimmon, a company that sells properties for an average of 163,000 pounds, also are increasingly using pre-manufactured elements in their homes.

Around a quarter of the 9,384 homes Persimmon sold last year were built using its Space4 timber-framed factory- built panels. That compares with about 20 percent in 2009.

“The timber frame unit will be erected inside a day and the whole build takes about six to eight weeks,” Space4 managing director Chris Hagan said in a telephone interview. “A traditional Persimmon build takes around 12 to 14 weeks.”

Huf Haus is a 100-year-old family-owned company based in the state of Rhineland-Palatinate. It was selling two or three homes in Britain in 1998. That’s up to about 25 a year now, or 14 percent of the 200 glass and timber houses are produced every year at the company’s factory in the village of Hartenfels.

Clients meet with an architect and together they design every inch of the new house, at a cost of about around 250 pounds a square foot. The buyer chooses where the bedrooms are, how much sunlight enters the house and the color of the roof.

The buildings take about a week to become “watertight” company architect Peter Huf said. About two months later the house is habitable with running water and heating.

“How many houses are built by the client?” Huf said in an interview at the company’s British show-home in Cobham, Surrey. “The developer doesn’t think about the garden, doesn’t think about the sun or where people will sit.”

The company manufactures all of its houses in Hartenfels, including those for buyers in the U.S., where homes are delivered by container ship and Huf’s builders are flown in from Germany. Prices start from $1.2 million, or $450 to $650 per square foot.

Crook, Huf Haus’s client near London, has no regrets after turning his back on the market for newly built houses in Britain. In addition to the cost of his pre-made home, he paid $1.14 million for the land in Oxted, Surrey.

“If we didn’t secure a house at a price we thought was reasonable, we would go off and build our own,” Crook said. “The house isn’t perfect, but it’s a hell of a lot more perfect than anything else I’ve ever seen.”

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