(Bloomberg) -- Chronic labor shortages in Britain’s construction sector could be tackled by building homes in factories, according to a lobby group.

Make UK Modular — a trade body calling for a radical shake-up in homebuilding — says the government will fail to deliver its target of 300,000 homes a year by 2025 without pivoting to factory-built houses. That’s because 17,000 new builders would be needed each year to complete the works, three times more than the current hiring rate, the lobby group said in a report.

“Modular can build homes quickly but also homes which are efficient to heat and run,” said Steve Cole, director of Make UK Modular. “Factories could operate at maximum productivity to deliver the homes Britain so desperately needs.”

Still, concerns have been raised about the safety of modular homes. The National Fire Chiefs Council last year called for the government to tighten the rules on testing modern construction methods.

Shortage List

Earlier this month, Chancellor Jeremy Hunt was forced to add construction to the labor shortage list following complaints from building firms that they couldn’t hire fast enough.

Modular homes — an umbrella term for properties built mainly off-site — require 50% fewer workers to construct the same number of buildings, according to the trade body. That could drive growth in the housing sector, which is enduring a fall in activity triggered by higher borrowing costs and the threat of a drop in house prices.

The issue of labor shortages “is now at critical point,” Make UK Modular’s Cole said. Factory-built homes “would help drive way faster growth in the sector,” he added.

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