Richmond Housing Partnership (RHP), a housing association based in Teddington in west London, saw the first new modular homes, manufactured at the L&G factory near Leeds, craned into place recently.

Each housing unit is 26 square metres, comprising a single bedroom, an en-suite bathroom, and a living room and kitchen area. It is fitted with solar panels and a solar battery which, combined with the insulation provided by the factory manufacturing, could keep heating costs at as little as £25 a year.

The product is made of a cross-laminated timber (CLT) frame and is clad with brick slips.

The housing association hopes to use it as a low-cost rental option for single people, especially key workers, struggling to afford soaring rents in the capital.

It believes it can rent the unit for £140 per week, well below the market rate for one-bedroom flats in the area which are currently being offered on property websites for around £250.

The organisation is in talks with several local authorities about securing planning permission for developments of the modular homes. It is understood councils are keen on exploring the product to house key workers.

David Done, chief executive of RHP, said: “We think it’s a really interesting product for the local market here. We are trying to do something new and different. I’m confident that local authorities will be very interested.”

Mr Done said he was confident this was a fire-safe design, but additional questions would be asked in the aftermath of the devastating fire at Grenfell Tower.“In the light of what happened, we will be asking more questions. CLT is a good product in terms of fire safety – it doesn’t tend to burn and when it does burn it chars. Those things have to be checked and proved before we build anything at all,” he said.