Manufactured homes are cheaper and faster to build than traditional houses, and can be placed on steeply sloping sites, a council report said.

Manufactured homes would have to pass the same council requirements as a conventional house, under the plan.

The report noted "the quality and diversity of manufactured homes has improved in recent years".

Councillor Wendy Harrison said new manufactured homes were a vast improvement on some old ones in caravan parks.

"Manufactured homes are much better designed and built now, and many of them have contemporary designs," Cr Harrison said.

Cr Ken Paxinos said he endorsed the proposal because it gives the community another housing construction option.

"Not everyone has the money for a mansion. Should they be denied the opportunity to own a house because of that?" Cr Paxinos said.

President of South Lakes Business Chamber and Community Alliance, Robert Kemmis, supports the idea, but was concerned about the possible impacts on local tradesmen.

"I don't know if we have a sufficient amount of tradies to meet the current demand - this [plan] may ease the current situation or exacerbate it," Mr Kemmis said.

Cr Paxinos said there would be too few manufactured homes built to impact the building industry.

"I think they will be the exception rather than the rule - you'd be lucky to get more than one or two on the same street," he said.

Council will consider public feedback before the matter is assessed in November.