Flat-pack housing dream is in crisis, warns Persimmon boss

Calls for intervention come after builder writes off of £25m investment in modular housing provider

Britain’s flat-pack housing dream is in turmoil, the chief executive of Persimmon has warned, as he urged Sir Keir Starmer to kickstart activity in the sector. 
Dean Finch said the modular property market was “absolutely moribund”, potentially jeopardising the Government’s plan to build an average of 300,000 new homes a year. 
His comments come after Persimmon wrote off a £25m investment in embattled modular house builder TopHat, citing a “re-assessment of risks” across the sector. 
Mr Finch said: “We are being prudent, recognising that the modular market needs the intervention it’s not currently getting.
“Without government intervention, modular is going nowhere. And that’s a shame.
“There’s absolutely no chance the ambitious targets the Government has laid out can possibly be delivered without more offsite manufacturing.” 
Despite this, he stressed that Persimmon will continue to work with TopHat, which he said was still “solvent and trading” despite recently being hit with a winding-up petition.
His scrutiny of the modular housing market comes after a Parliamentary Committee last year found that the sector was in “disarray”. 
Lord Moylan, chairman of the built environment committee, said at the time: “Simply throwing money at the sector hasn’t worked. 
“If it wants to encourage modern methods of construction it must acquire a much deeper understanding of how it works, develop a clear strategy, and demonstrate leadership.”
Persimmon invested in TopHat last year alongside Aviva Capital Partners, in a £70m funding round backed by Goldman Sachs. 
TopHat, which posted losses of £20.4m in the 12 months to October 2022, also secured a £15m loan from Homes England just 12 months ago.
Away from challenges across the modular sector, Mr Finch said Persimmon was increasingly upbeat about signs of recovery across the housing market. 
The FTSE 100 housebuilder posted an uptick in completions in the six months to June 30, while pointing to signs of growing demand on the back of cheaper mortgage rates.
Bosses said they were confident of delivering around 10,500 news homes this year, which was at the top end of its previous guidance.