Major UK Modular Housebuilder Falls Into Administration
Making money out of modular housebuilding is proving harder than its champions thought.
High hopes were pinned on modular construction as a cheap and efficient way to scale up housebuilding. But simply being a good idea isn’t enough to assure financial success, if the appointment of administrators at House — Urban Splash House Holdings Group, is a guide.
Companies involved include Urban Splash House Investments, Urban Splash House, Urban Splash Modular, Port Loop Holdings, Port Loop and Port Loop (Subco1).
Partners from Teneo have been appointed administrators by the directors, Place North West reported. They will oversee completion and sale of a series of high-profile schemes including New Islington, Manchester; Port Loop Birmingham; and a £55M project at Wirral Waters.
A statement from administrators blamed “operational issues” at its Derbyshire factory. It follows the collapse earlier this spring of Caledonian Modular, rapidly acquired by a concrete frame maker. Meanwhile, one of the biggest new modular entrants, backed by Legal & General, has racked up substantial pre-tax losses over several years, of more than £30M in both 2019 and 2020, the most recent periods for which figures are available.
Urban Splash's modular business won applause for innovation, but always struggled. The Derbyshire facility came with the purchase of SIG Business Systems, a loss-making modular factory business that was acquired for just £1 in 2018.
Acquiring the factory was supposed to smooth out supply chain problems that had left residents complaining about a pioneer modular scheme in Salford, as Bisnow reported in 2019.
The House business was demerged from the wider Urban Splash group in 2009. However, Companies House paperwork revealed that Urban Splash founder Tom Bloxham remained controlling party of Urban Splash House Holdings until October 2021, a fact reported as late as March 2022. Significant control of that business now rests with Sekisui House UK Ltd.
House was a joint venture between Japanese firm Sekisui and shareholders of Urban Splash, along with government agency Homes England, which controlled 4%. Homes England also had a number of charges over Urban Splash House Investments and Urban Splash House Holdings, all of which were discharged on Monday this week.