Industry Intel

What are the consequences of The Building Safety Act for Developers?

The “Dreaded” Second Stair Core

Having been a Project Manager and now a Recruitment Consultant within the Real Estate Development space I often get unique and impartial views from both employees on the ground, and Industry Leaders who are pushed to make the difficult decisions.

The past few years have certainly been challenging within the development space, caused by both worldwide and domestic incidents. What these are will come to no surprise to readers. The first beginning with a “C” and ending with “OVID”, BREXIT, and a certain World Leader suffering from “small man syndrome”. These have inevitably led to delays, disruptions, and a significant rise in costs. On top of the clear causes mentioned previously, the main hurdle that Developers are now also having to overcome is the introduction of the Building Safety Act

Finally, Developers have some much-needed clarity on the matter as the new rules were confirmed by Michael Gove on Monday 24th July. Second staircases will need to be installed on all new buildings taller than 18 metres. Consultations last year had an initial threshold of 30m for second staircases in new schemes which has already been adopted in London and subsequently led to the shelving of a series of planned new residential schemes.

No one can argue that these aren’t necessary. The tragedy of Grenfell tower is an incident that should never have happened, and/or be seen again. The foremost objective of the Building Safety Act is to enhance safety standards in high-rise buildings by imposing stricter regulations and accountability measures. On the back of this the Act should instil confidence in residents and prospective homebuyers. I remember reading about new home buyers, after toiling hard to save enough for a deposit, purchasing their new apartment to then realise their investment is worth nothing due to defective cladding. A heart-breaking situation for anyone to be in which I’m sure you can agree.

The addition of second stair core resulting in a significant reduction of the saleable area of the development, along with increased construction costs, have made developments no longer financially viable. This has led developers to change the purpose of the development (costing time and money) or to put them on hold until material costs stabilise (costing time and money). This has caused developers to have no option but to make redundancies. Lendlease’s recent announcement to cut 200 jobs from the UK business with the Development Division being the hardest hit is a sure example of this.

Another clear example of this was Ealing Council and developer Vistry Partnerships scrapping plans to redevelop the council’s ageing headquarters to build a new civic centre alongside nearly 500 flats. Since the redevelopment project was originally proposed in 2014, significant events had substantially changed the risks and viability of the scheme.

The creation of a digital ‘Golden Thread’ of information which will capture a building’s data from the earliest design stage, during construction right through to occupation and decommissioning, can add further costs and slow down the development process due to the additional gateways and documentations required. This includes an auditable trail of accountability, recording which decisions have been made, when, and by whom.

While the Act has resulted in delays, additional costs, and heightened public scrutiny, it also presents opportunities for collaboration and innovation in the quest for safer high-rise buildings. As developers adapt to the new requirements, striking a balance between safety and efficient development processes will be crucial for the continued growth and sustainability of the private sector real estate industry in the UK.

We are in a Housing Crisis and even if Financial Institutions do introduce measures for deposit free mortgages, these surely will come to no avail unless the Government provides more support to Developers to make development more feasible. The consistent addition of more hurdles will only make the private sector look for more viable options or look elsewhere.

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