This paper aims to explore how prefabricated methods of construction could address housing shortages in the UK. The available literature is reviewed to evaluate current conditions of housing as well as prefabricated methods of construction in the UK. Advantages and limitations of prefabrication are investigated and discussed in relation to the current conditions. Interviews are also conducted as well as case studies in order to understand the challenges and to provide first hand information on current industry practises in the UK housing construction industry. Findings indicate that although offsite construction is widely known and acknowledged, there is little encouragement and incentives to maximise the use of prefabrication in the UK. Extra costs, larger lead time and engineering issues are found to be the key factors preventing the innovative processes of prefabricated construction in the UK’s residential sector.