A white paper which will be published next month will include measures encouraging banks to lend to off-site home builders, according to the Daily Telegraph.
Ministers have reportedlybeen impressed with construction speeds of the latest prefabs, with some erected on site in just 48 hours.
A government source told The Telegraph: “The first and most obvious advantage is speeding up the building of housing. There is pretty good evidence that if you did it at scale it is cheaper.”
House building has lagged behind targets for several years, with planning permission and a skills shortage cited as reasons for the delays.
The Communities Department hopes the measures will lead to 100,000 off-site manufactured home being built over this parliament.
Gavin Barwell, the housing minister, said: “Offsite construction could provide a huge opportunity to increase housing supply and we want to see more innovation like this emulated across the housebuilding sector.”
The Government is looking at two areas of potential support. Firstly, providing direct funding to help firms build new prefabs. Secondly, convincing risk-averse lenders to give out more loans.
Ministers have visited Accord Group, a housing association in the West Midlands, which claims it can produce a three-bedroom house from scratch in a day at its factory.
Pocket, a London-based firm building affordable flats for first-time buyers, has also been visited by Barwell and communities secretary Sajid Javid.