Housing crisis

Goldman Sachs-backed homebuilder’s mega-factory could help solve national housing crisis

A British homebuilder backed by Goldman Sachs (NYSE: GS) has confirmed plans to build a mega-factory of flatbed housing that will solve the country’s housing crisis.

TopHat, which is majority-owned by the investment bank, plans to manufacture 4,000 flat houses a year at its new factory in Corby, Northamptonshire, from next year.

The company, which is led by chief executive Jordan Rosenhaus and has raised £75m in capital investment from Goldman Sachs (NYSE:GS), was founded in early 2016 and began producing kit homes in early 2018 at a factory in South Derbyshire.

Its existing factory uses precision construction methods and durable materials and can build houses in 10 weeks.

The first residential site to install its kit buildings was Kitchener Barracks in Kent, which opened in the second quarter of 2019.

TopHat obtained planning permission to construct three four-storey modular apartment blocks on the site, comprising 96 units, more than a third of which were affordable.

It also has a five-year contract with BoKlok UK, a house supplier owned by Swedish multinationals Skanska and Ikea, to manufacture energy-efficient two- and three-bedroom timber frame houses.

The homebuilder recently joined the Building Better Framework, a partnership of housing associations supported by the National Housing Federation and implemented by Procurement for Housing.

His plans to boost UK homebuilding capacity come amid a continued rise in house prices, which have risen for an eleventh consecutive month, according to the Halifax House Price Index. Home prices rose 1% in May and have risen 74% over the past decade.

Homebuilders have faced rising interest and mortgage rates, as well as supply chain inflation and the impact of re-coating costs.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said ‘as the cost of living bites down there will be many more who will end up dropping a notch or two’ despite homebuyers looking for more of space and looking to use the foreclosure savings to purchase property.