Over six years have now passed since Grenfell Tower was engulfed by the worst UK residential fire since the Second World War. The Hackitt Review – published a year after the devastating events in west London – declared the current system of building regulations “unfit for purpose”, calling for a culture change to ensure buildings become safer, both now and in the future.
These findings have since paved the way for sweeping regulatory change in the form of the Building Safety Act 2022 (BSA). In the two years it took for the bill to pass through parliament, the industry understandably paid close attention ensuring it was well placed to comply with heightened standards by the time it became law.
A year and a half since the act came into play, the full extent of its impact is still being understood. In many cases, developers are encountering a number of unexpected surprises that risk upsetting the viability and delivery schedules, particularly in respect of high-rise residential buildings (HRBs). With further secondary legislation to follow, it is important that the industry remains vigilant to ensure potential risks are understood.
The story so far
The last two years have been precarious for the housing sector as it has grappled with high interest rates, material costs and labour shortages. On top of these intense market pressures, those developing HRBs have also had to invest significant time and resources adapting to the higher legislative thresholds set out in the BSA.
A key feature of the act has been the establishment of the Building Safety Regulator (BSR) – an independent body tasked with monitoring the construction, completion and occupation of all HRBs.
The deadline to register HRBs with the BSR was 1 October 2023 meaning the industry’s immediate focus went into gathering the relevant technical details required to ensure compliance.
The process of getting paperwork aligned with new requirements highlighted a number of areas of uncertainty within the BSA. As the legislation anticipated, establishing the ‘principal accountable person’ (PAP) has been complex in many cases. Now mostly established, PAPs’ focus must switch to staying on top of the detail and (1) putting forward a convincing building safety case – due to be submitted in April 2024 and (2) working out what information is required to be kept and provided under various regulations.
Uncertainty remains for new developments
For many developers, adapting to changing legislation has so far been an onerous, technical and expensive task involving significant assessment and a great deal of prior planning. This has disproportionately impacted SME developers, who do not have the same level of resources to draw on as their larger counterparts.
But while laborious, and costly, they are at least set in stone. Changes to come in April may be daunting, but the industry has time to understand these changes and get details aligned to ensure that they comply.
Far more damaging to the sector is uncertainty. Precisely how the Gateways will operate and what information is required when remains uncertain. There is also uncertainty around liabilities under the BSA, particularly in relation to products. On the sales front, clarification is still needed over the position of aspects such as new-build home warranties.
This year’s general election also adds an extra layer of uncertainty into the mix (albeit it seems unlikely any of the BSA provisions will be changed by an incoming government, regardless of colour).
Adapting to the future
The development of high-rise residential buildings are incredibly complex projects that involve a whole range of viability considerations. Difficult market conditions, changing regulation, and uncertainty regarding further policy changes are only adding to the challenges faced by developers of all sizes.
Keeping a close eye on policy developments – and remaining agile to change – is imperative if developers are to succeed. Standard contracting models used throughout the industry now conflict with new regulation, something that quickly needs addressing.
Although its five years since the Building Safety Act had been past, the truth is it is still very much in its infancy. With new legislation to come into play in the new year, the industry needs to be braced for further turbulence if it is to deliver the homes that this country needs.