The UK faces an urgent challenge to simultaneously accelerate housing delivery and reduce whole-life carbon emissions, yet robust empirical evidence on the carbon performance of modular steel housing remains limited. This study aims to quantify the carbon impacts of a modular light-gauge steel frame social housing dwelling in the UK and to benchmark its performance against contemporary low-carbon construction typologies. A cradle-to-grave life cycle assessment was conducted using primary project data from a real modular housing development, with embodied carbon modelled in One Click LCA and operational energy assessed through SAP 10.2-verified datasets. The results indicate a total whole-life carbon footprint of 91.3 tCO₂e over a 50-year period, with embodied emissions (A1–A3) accounting for 38.2% and operational energy and water use contributing 48.1%. The normalised embodied carbon intensity of 366 kgCO₂e/m² (A1–A5) is comparable to recent high-performing cross-laminated timber buildings, demonstrating that optimised modular steel systems can allow for low-carbon outcomes typically associated with bio-based construction. Sensitivity analysis shows that low-carbon foundation concrete, bio-based insulation, and steel optimisation can reduce upfront emissions by approximately 8–10%. Dynamic energy simulations were also used to assess how different design choices influence operational carbon emissions. This study provides transparent, real-project evidence of the whole-life carbon performance of UK modular light-gauge steel frame housing and identifies practical design strategies for further decarbonisation. The findings support informed decision-making for policymakers, designers, and housing providers seeking scalable, low-carbon residential solutions.