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As well as the building safety challenge, developers are also facing a market challenge which combined together are currently pausing and stifling residential development.
It is no secret that the UK is currently in somewhat of a housing crisis. The demand is there for more accommodation, but it needs to be the right type of housing and available to the people who need it for the model to work.
With this the case you would assume that residential development is booming but the reality is that there are some significant obstacles to development at present.
As we have written about before the new building safety regime poses a significant challenge for residential developers. It introduces fundamental changes the process of the project lifecycle and ways of working in construction and property. It requires investment in processes, systems, and people to upskill and get compliant with the requirements of the act.
The second building safety challenge is the looming potential second staircase mandate. Whilst the government have attempted to unlock this by introducing a transition period of 30 months, developers remain reluctant to proceed with a single staircase in residential developments above 18m but with the design detail of the second staircase requirements yet to be issued as part of an update to Approved Document B, there is hesitance to proceed with two staircases either until the details are understood.
Then, as well as the shift in building safety requirements, there is then the challenge of the market. Inflation is driving up materials and labour and whilst it is beginning to fall, it will be a while before the construction market begins to feel the effect. This rise in prices has meant development appraisals which did stack up, no longer make sense in the current market with a lot of developers shelving schemes.
With the next election required to take place by January 2025, the government will be looking to start building more homes and demonstrate that they are addressing the housing challenge. But to achieve this, they need to unlock the challenges developers are currently facing.
The government have already set out their stall in regard to building safety. Some transitional periods have been introduced in an attempt to boost development, but the government have been clear that the costs associated with building safety need to be absorbed by developers.
So now it is about how to streamline the process of getting compliant with the requirements of the Building Safety Act and do it as efficiently as possible. This will require some up-front investment but once implemented, the new regime will potentially actually provide cost benefits. Design and construction methodology will need to be thought through earlier in the project lifecycle which should mean better upfront design and there is likely to be less change introduced to projects during construction due to the 6 week approval period from the regulator for major changes, which in turn should lead to better cost assurance.
As part of the plan to tackle the challenging market conditions, the government is looking to ease the sometimes onerous and confusing planning process for developers and reviewing business taxes. Whilst these measures will certainly help development, it does not fully solve the challenge.
To unlock development, the new requirements of the building safety regime need to be efficiently integrated into current working practices through processes, systems and documentation. It requires a ‘right first time’ approach to design and construction which will help to limit the impact and risks the regime poses to project costs and programmes.
To get appraisals to stack up and make developments viable, it requires an alternative approach to design, procurement and construction. With our partners Integrated Project Delivery (IPD), we are currently supporting developers not just with building safety, but to reduce costs by interrogating designs and construction methodologies to drive efficiencies, to make developments viable.
In design, we have helped developers increase saleable development areas by making the structural design more efficient, reviewed architectural cladding systems, standardising them and looking at prefabrication of systems where possible. In construction, we review methodologies and programmes using 4D modelling to understand the sequencing of works and activities, resequencing them where possible to improve programme times and in turn costs.
We then take the efficiencies made and make sure they are realised in procurement, building a strategy for our clients.
We do this by collaboratively working with developers, their design teams, and contractors. We believe driving efficiencies in design, procurement and construction coupled with a streamlined adoption of the new building safety regime will help to overcome the challenges developer face and unlock more residential development.
If you need help or support to effectively implement the new building safety regime or to make developments viable contact us Building Safety Act Consult Ltd or our partners Integrated Project Delivery LLP.