First reported in Sky News and then The Times, the firm reportedly informed the 475 people that worked at its factory in Selby that most of them would be made redundant.
Legal and General first launched its modular homes business around seven years ago with a factory which, at full capacity, would have the ability to build 3,000 homes per year. This includes two and three-bedroom houses and apartments.
In a statement in 2021, Rosie Toogood, chief executive of Legal and General Modular Homes, said that it had invested £30bn so far into the business.
A Legal and General statement said that it was “proposing to reduce business activity and cease new modular production” in its factory in Selby and it was “reviewing and assessing potential strategic options for the business”.
“As a start-up business with a significant fixed cost base, a strong and predictable site pipeline is required to make Legal and General Modular Homes a successful sustainable business. However, a number of factors, including long planning delays and the impact of recent macro events such as Covid, have meant the business has not been able to secure the necessary scale of pipeline to make the current model work. Without this pipeline, it has not proved possible to build a business that can sustain the significant running costs of the large factory in Selby,” it said.
The firm continued that it was commencing consultation with all employees around the proposal to make the “majority” of Modular Homes roles redundant.
“The business will be doing all that it can to support employees during this difficult time and will be actively exploring opportunities for redeployment,” the statement added.
‘A challenging and uncertain period’
Bill Hughes, chair of Legal and General Modular Homes’ Board, noted: “Legal and General is proud of what we have achieved in bringing forward a new approach to construction through our factory. However, without the necessary scale of pipeline, it is not sustainable to continue producing more modules. We are therefore reluctantly proposing to reduce business activity and cease production of new modules at the factory.
“Regrettably, this includes commencing consultation with all employees around the proposal to make the majority of Modular Homes roles redundant. We recognise this will be a challenging and uncertain period for our staff and we will be actively exploring redeployment opportunities and supporting them during this difficult time.
“Legal and General remains deeply committed to the UK housing sector, where we have delivered 15,000 homes over the last three years, and to our valued industry partners and customers. As such, we are continuing to actively explore all options available to us and will retain a select workforce to ensure high quality delivery and aftercare services for our existing customers, whilst engaging with each of our partners regarding ongoing modular projects.”
Modular homes are a burgeoning industry in the UK and are seen by some as a long-term solution to housing crisis in the UK. They are often more energy efficient and more affordable, however, there can be issues around financing, land restrictions and resale issues.
