Systemic misalignment and the collapse of category 1 MMC firms in the UK housing sector

Modern Methods of Construction (MMC), particularly volumetric modular housing, has been promoted as a response to housing shortages and productivity challenges in the UK. Despite substantial policy support and investment, several high-profile firms have collapsed, raising questions about the viability of industrialized housing within existing delivery systems. While prior research has focused on the technical and operational benefits of MMC, limited attention has been given to how production strategies interact with institutional conditions to shape firm outcomes. This study examines the collapse of four UK-based Category 1 MMC firms using a qualitative multiple case study approach. A Theory of Change (ToC) framework is applied as a diagnostic tool to reconstruct the causal assumptions linking production systems to delivery outcomes. The findings identify a recurring breakdown at the process–output interface, where production capacity fails to translate into sustained housing delivery due to unstable demand, fragmented procurement, and planning uncertainty. This is conceptualized as institutional misalignment between manufacturing-based production models and project-based housing delivery systems. The study contributes by demonstrating how unfulfilled institutional assumptions constrain the scalability of industrialized construction, extending existing MMC strategy literature beyond production capability to system-level alignment.