Goldman Sachs puts millions into flat-pack housing in the UK

TopHat designs and manufactures modular homes, which are built in sections that can be put together on development sites.

Goldman Sachs has made an investment in a London-based start-up specialising in technology-led prefabricated homes, claiming the young company can help to solve the UK’s housing shortage.

The US bank has put £75m into TopHat, which was set up in 2016 to design and manufacture homes in sections — or modules — that are then transported to development sites and put together.

The UK government has set a target of building 300,000 new homes each year by the mid-2020s. In a white paper from February 2017, it described the country’s housing market as “broken”, with too few homes available and high prices putting them out of reach for many people.

In that paper, the government highlighted the opportunity for prefabricated homes to help diversify the housing market, saying it wanted to “encourage institutional investment in the private rented sector and promote more modular and factory-built homes”.

In the announcement of Goldman and TopHat’s deal, Gordon More, chief investment officer of Homes England, the government body that releases land to developers, said: “If we are to increase industry’s capacity to build high-quality homes offsite, it’s vital others join us in our mission.”

More described Goldman’s backing of TopHat as a “significant investment in a growing [small or medium-sized] business that is delivering a real step change in the housebuilding industry”.

TopHat started production of housing modules last year. The first site to use its product is in Chatham, Kent, and is expected to open in the coming months.

Tavis Cannell, a managing director at Goldman Sachs, said: “TopHat’s technology-driven approach has the potential to make a significant impact on the UK’s housing shortage.”

To contact the author of this story with feedback or news, email Tim Burke