In May 2023, we joined 7,500 other attendees at the second UKREiiF conference in Leeds.
Hydrock hosted a panel of industry experts in our session, “The Building Safety Act: Culture change or culture shock?”, which aimed to tackle the complex legislation that’s been looming on the construction industry’s horizon – and is now fast approaching.
What were the key Building Safety Act talking points? What did everyone want to know? We cover the headlines below.
The feeling is mutual
As the biggest change in building legislation for decades, the Building Safety Act is causing an undercurrent of concern across the industry. Many are worried, with many more waiting for clarity about what they need to do next – whether that’s via specific secondary legislation that is yet to emerge, or in more general terms.
“Everybody in our industry, at each stage of building and developing a building up to operation, is experiencing similar things when it comes to this legislation.” Todd Marler, Senior Director of Operations at Greystar told Hydrock’s panel. He wondered where to start with this shake up of regulations, which he called “ambiguous and convoluted.”
There is no doubt though, that the changes are welcome: another Grenfell simply cannot happen. The overwhelming majority of the industry wants to do the right thing, and it seems that this is the moment to do it. But everyone is also looking for leadership, clarity, and perhaps reassurance, on how to do it properly.
Darren Rodwell, Leader of Barking and Dagenham Council, commented that the new system should be more pragmatic. “We're all being let down by a poorly devised set of rules that no-one at this table can truly understand” he said. He questioned whether confusion now could still lead to more tragedy down the line, concluding that it is time for the industry to “get a grip.”
The industry knows that safety and peace of mind for residents is paramount. Now, it seems to be a question of how we get there.
Worries and fears for building residents
Fiona Fletcher-Smith, Chief Executive at L&Q, opened the panel with a challenge: “People living in our buildings are living in fear. We’ve created an environment of fear. Let’s sort it out to give people peace of mind,” she said.
The tragic story of the Grenfell Tower fire put building safety at the centre of public consciousness in a way it hasn’t been for a long time. Fiona argued that this has created stress for leaseholders and residents currently living in similar buildings.
But perhaps, she argued, the communication around the Building Safety Act as a solution could have been clearer. Maybe a lack of understanding could be contributing to wider fears?
Rob Perrins, Chief Executive at Berkeley Group argued that it’s not just residents’ immediate safety that’s causing stress and uncertainty. The Building Safety Act’s Gateway process could also have potential impacts for buyers of a new build property trying to secure a mortgage. Buyers will get a mortgage offer which has a three-month window; however, the Gateway 3 process requires a new build to stand empty for potentially 12 weeks for the Building Safety Regulator to be satisfied that the building is safe. Buyers could lose their mortgage in that period.
The waiting game
Secondary legislation is due to be released in summer 2023 and it seems like the industry is waiting with baited breath to see what further clarification this will provide.
However, it’s worth noting that this type of legislation takes 40 days to get through parliament, and it could require further sign off from the Privy Council, which could take another several weeks – all while Parliament’s summer recess begins on 20th July and ends in early September. And yet the Building Safety Regulator’s October registration deadline gets ever closer. Is there more that we can be doing as an industry than just waiting?
It seems there are currently more questions than answers on multiple aspects of the Building Safety Act, including second staircases, the gateway process and the appointment of accountable persons.
“There just needs to be some firming of the policy. The government needs to decide quickly what the rules are around a second staircase, so we have certainty,” said Rob Perrins, Chief Executive at Berkeley Group. According to the legislation, the Building Safety Regulator will require the Principal Client and Designer to make a written statement that a single staircase is safe, but it will be interesting to see if anyone will be willing to put their name on the line.
For Todd Marler, Senior Director of Operations at Greystar, the responsibilities of the Accountable Person role need more clarity. He explained that with their portfolio of multiple buildings, there is complexity around the actual ownership. For example, on some schemes, Greystar is a third-party owner, whereas in other schemes they are just an investor of certain portions of the portfolio. So how is an accountable person chosen? He wants to see clarity on how to be compliant from an operational perspective.
Closing the skills gap
It’s not just the academic understanding of this complex legislation – it’s actually getting the necessary work done that is an equal source of concern.
Fiona Fletcher-Smith, Chief Executive at L&Q told the panel that while everyone wants to do the right thing, there’s a skills gap that the UK needs to address, otherwise it will fail to implement the Building Safety Act. “There simply aren’t enough people to do the work — they’re not out there. We need to get a grip on the skills issue,” she said, questioning why the UK does not see vocational education as equally valuable as academic qualifications.
There are also questions around how competency will now be measured across the board. Some professional bodies have registered memberships, while others do not, which could create a lack of consistency for the Building Safety Regulator.
Another key skills question is: is the Health and Safety Executive (overseeing the Building Safety Regulator) properly resourced for the large increase in workloads it is about to see? Lee Powell, CEO at GMI Construction, questioned whether they will be properly resourced by the autumn, when the act is set to be fully implemented.
Fiona thinks this starts with training, however the risk is that even with new government funding, we could still be years away from actually having the right amount of people with the necessary skills.
Stalling investment and a sector recession
Fiona disclosed that L&Q has had to pause all future development for the time being to focus on making all 2,800 of their current buildings compliant. All buildings over 18m have been done and there are around 1,000 more still to do between 11-18m. The housing association is spending £3 billion on general investment and to reach the decent homes standard plus.
Lee Powell, CEO at GMI Construction is concerned about the sector tipping into a recession due to the financial implications of complying with the Building Safety Act. He explained that as Gateway 3 must be signed off before the building can be operated, this could end up being a costly exercise – which in turn could make schemes less viable and have a knock-on effect on affordable housing provision.
Hydrock’s Will Freeman remarked that at the RICS conference 2023, it was suggested that investors may prioritise other regions, such as the US and Europe, rather than take on the challenge of the Building Safety Act in the UK. However, he argued, once the BSA is embedded into our working culture the markets will understand how it works and come back.
What came out of UKREiiF is that the industry is in a state of flux around the Building Safety Act – it wants certainty around roles, responsibilities and process. The parameters of the act could be legally changed at any time to apply to other aspects of safety/comfort (such as mold), or even other types of buildings. Concerns around delays, financial impact, resident welfare and a skilled workforce are keeping the industry up at night.
If these are the concerns of large and powerful players in the property industry, how do smaller landlords and developers navigate the same without significant resources? Support and clarification from the UK Government ahead of the secondary legislation would be enormously helpful for nearly everyone in the industry.
It ultimately comes back to what Dame Judith Hackitt told the Building Safety Regulator conference in March 2023 – don’t wait for more legislation or to be told what to do, use your common sense. This has always been about doing the right thing. It's time to lead.
It is clear that the Building Safety Regulator cannot be seen to fail. It will have to remain firm, not allowing an imperfect building to make it through the process. While we all want to get it right, taking a more pro-active than reactive approach will at least cast our efforts in a good light – even if we hit a few bumps in the road along the way.