Lambeth & Southwark Housing Association has agreed a £11.5m partnership with Apex Airspace to deliver modular rooftop homes.
Lambeth & Southwark Housing Association are to consult with their residents before a formal deal is signed.
Apex Airspace use modular construction techniques to build homes on rooftops, making use of the space in the capital.
The duo will build 28 new flats in Southwark, of which 11 will be for affordable rent.
The developer will also renovate the existing building and install a new lift. Due to the method of construction, Apex believe they can deliver in just 45 weeks.
Modular homes are becoming increasingly thought about as an alternative to traditional methods of construction.
Back in December, Your Housing Group signed a £2.5bn deal to go into a joint venture and build 25,000 modular homes by 2022.
At the time, Housing Minister Gavin Barwell, said: “This government is committed to delivering a more diverse and innovative housebuilding sector and our £3 billion Home Building Fund will encourage more pioneering housebuilding projects and partnerships like this one.”