The Intermediary – August 2026 - Flipbook - Page 66
SPECIALIST FINANCE
Opinion
Factory-built
housing through
a lender’s lens
W
hile planning
dominates the
housebuilding
debate, a
number of ageold challenges
continue to hold back delivery. Build
cost inflation, labour shortages and
programme delays remain a persistent
headache for developers and are oen
just as significant a hurdle.
These variables, which are so
difficult to control, pose a problem for
lenders, too – a lack of uncertainty
and predictability impacts risk.
It’s therefore no surprise that more
developers are exploring modern
methods of construction. While not
a silver bullet, factory-led approaches
can bring greater sureness to the
build process – particularly around
programme delivery – at a time when
predictability is increasingly hard
to come by.
Experiences teaches lenders that
fewer unknowns make for beer
outcomes. At Paragon, we spend
our time working closely with small
to medium (SME) developers on
schemes, delving deep into how risk
really plays out across a project’s
lifecycle. That means understanding
not only the headline numbers, but
how a scheme will perform when it
meets real-world constraints, such as
planning and site conditions.
This is where offsite construction
starts can shi the dial. UK
manufacturer British Offsite’s
UNisystem is a good example of
how manufacturing principles can
be applied to housing construction.
Precision engineered light steel panels
are produced in a controlled factory
environment, designed to integrate
seamlessly with architectural and
structural requirements – meaning
large parts of the build are completed
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The Intermediary | August 2026
before anything arrives on site.
The implications are tangible,
with benefits for both sites and
balance sheets. Once on site, panel
installation helps structures take
shape rapidly, reducing reliance on
trades and meaning programmes
become easier to predict, with weather
exposure reduced.
British Offsite estimates that using
its system can cut the time from first
dig to handover by up to 30%, while
also reducing waste and preliminary
costs in the process.
We’ve seen this first-hand
through our work with Cammaro
on a £32m, 138-unit purpose-built
student accommodation scheme in
Cambridge. The project is using the
manufacturer’s light steel frame
solution, supported by a development
finance facility from Paragon, and has
reduced build time from breaking to
practical completion by over a third
– saving a significant chunk of both
time and costs.
Cambridge is a challenging
environment to build in. Planning
is complex, sites are constrained and
there is lile margin for error. Offsite
construction has allowed Cammaro to
reduce site risk and compress delivery
times, while maintaining quality and
design flexibility. For a growing SME
developer, that confidence in delivery
is genuinely transformative.
Why are specialists interested?
First, manufacturing-led construction
can make cashflows more predictable.
Faster, more reliable programmes
reduce the risk of prolonged interest
accrual and delayed exits. Second,
quality control is improved when
more of the build happens under
factory conditions, reducing the
chance of late-stage defects or
remediation issues.
SIMON DEKKER
is senior relationship director at
Paragon Development Finance
Modern methods
of construction bring
manufacturing principles
of discipline, predictability
and resilience”
Perhaps most importantly, specialist
lenders are set up to engage early
and in detail. Understanding how an
offsite solution works in practice, how
it has been engineered and how it fits
a specific scheme, allows us to take a
more informed view of risk.
I took the time to visit British
Offsite’s factory a few months ago
and was struck by the sheer scale and
efficiency of the operation. Seeing it
in action with my own eyes instilled
greater confidence in our partnership
with Cammaro, and I truly believe
that’s where specialist lenders like
Paragon make a difference – we don’t
take a one-size-fits-all approach to
development finance.
SME developers play a critical role
in housing delivery, but operate in
an increasingly tough environment.
Modern methods of construction
bring manufacturing principles
of discipline, predictability and
resilience into housebuilding,
improving reliability at a time when
margins for error are narrower than
they’ve ever been.
For lenders like Paragon, supporting
this shi reflects a commitment to
helping good developers stay active
and deliver homes, at a time when
market conditions are working
against them. ●
