Meeting Housing Needs In The Wake Of The Hong Kong Crisis: Will Modern Methods Of Construction Be Part Of The Solution?

Introduction

As a result of China’s new security law coming into effect, Hong Kong has found itself engulfed in civil unrest. Beijing has now been granted permission to clampdown against dissent, criminalising sedition and effectively restraining protests with punishments up to life in prison.

On Wednesday 1 July 2020, British Prime Minister Boris Johnson held that China was in "clear and serious breach" of the Sino-British agreement under which Hong Kong had been handed over to the Chinese authorities. The agreement, formed in 1997, established a “one country, two systems” principle, whereby Hong Kong citizens would be entitled to certain rights and freedoms which do not exist in China.  As part of his response to the global anger and civil disruption, the Prime Minister confirmed that he would offer Hong Kong residents, who hold British National (Overseas) passports, the chance to settle in the UK and eventually seek citizenship. The UK government’s arrangements to enable British National Overseas (BNO) to come to the UK, will proceed on Wednesdayand details of the “new bespoke route” will be announced in “due course”.  

The Prime Minister noted that about 350,000 UK passport holders, and 2.6 million others eligible, will be able to come to the UK for five years with an option to apply for citizenship after a year. This could essentially mean accommodating an additional 3 million people who would need to be housed accordingly. Although it is highly unlikely that this number of people will actively seek to leave Hong Kong for a new life in the UK, it does however give us an idea as to the large number of people who could be eligible to do so. Not only could this present a strain on the economy as a whole (in the wake of the COVID pandemic), it could also put strain on our housing resources.

In light of this situation, should we now start considering how we can accommodate a potential influx of new British Nationals seeking settlement in the UK, and could this require a rapid acceleration in the delivery of housing?

Could Modern Methods of Construction (MMC) be PART OF the answer?

The first issue to consider is the current need for housing for residents already living in the UK. According to the Mayor of London’s current London Plan (2016), London alone will require between approximately 49,000 (2015-2036) and 62,000 (2015-2026) more homes a year. The demand for new build homes has reportedly rocketed since lockdown restrictions were lifted. There is already a deficit of housing to accommodate the country’s current residents and the Government is under pressure to speed up delivery to meet the expected demands.

However, there are options that the Government may seek to consider, one of them being Modern Methods of Construction (MMC). MMC is essentially the ability to build and construct, by utilising off-site and on-site methods of construction. The need for this form of construction has been driven by a range of factors including demands for faster construction, coping with skill shortages, and improving sustainability. The advantages include reduced demands on facilities and equipment at the construction site, the potential to use state budget funds or special purpose funds and less environmental pollution during the process of construction. MMC is regarded as a resilient, efficient and environmentally advantageous form of building and we expect to see momentum build behind offsite manufacturing as we enter the recovery phase.

This relatively new form of building could help provide the Government with the means to supply housing within a shorter space of time in comparison to traditional forms of construction, alongside other ways of supporting the traditional housebuilding industry.

Response to crisis going forward

It is important to note that the construction industry, including housebuilders, is considered to be a major player in aiding economic recovery (post-COVID) and the Government is working closely with the housebuilding industry in particular to get construction levels back to pre-COVID normal. This was clear from the Prime Minister’s speech on Thursday 25 June and his pledge on behalf of the Government to “build, build, build”. It seems especially pertinent now, given the current crisis that we make and strive to adhere to progressive plans. In order to make good our offer, the Government will need to consider stepping up its response to the housing crisis so as to accommodate both the needs of the country’s existing residents and those coming from Hong Kong to seek sanctuary in the UK.

This article was written by Georgia Sutton and Alexander Gold, for more information, please contact Georgia on +44 (0)20 7438 2246 or georgia.sutton@crsblaw.com