Insurance giant Legal & General (L&G) has announced that it will halt new production at its modular housing factory in Selby, Yorkshire, resulting in most jobs at the unit being cut.

L&G cited “a number of factors,” such as planning delays and the impact of Covid, as the reasons behind struggling to secure the scale of pipeline needed “to make the current model work.” This has made it difficult for the arm to support the sizeable running costs of the Selby factory.

L&G Modular Homes, the division responsible for the factory, was launched in 2016 with plans to deliver up to 3,500 homes annually. The company had also announced its intention to take on an additional 350 staff in 2021 to deliver on its then-growing pipeline. However, L&G’s latest statement reads that “without the necessary scale of pipeline it is not sustainable to continue producing more modules.”

The company will now enter into consultation with all employees of the division and intends to make the majority of staff redundant. “The business will be doing all that it can to support employees during this difficult time and will be actively exploring opportunities for redeployment,” according to L&G’s statement. The company also said it is “reviewing and assessing potential strategic options” for the division.

L&G had previously stated that modular homes were an “impactful solution” to creating quality, affordable, “carbon-friendly” housing. However, the latest decision highlights the challenges facing the modular housing industry.