Discussions on viability dominated the fourth annual meeting of construction professionals in London where talk focused on how projects can be delivered in a challenging market
Questions around what options the government has to ease viability pressures on housebuilders and contractors dominated discussions at the fourth Building the Future Conference yesterday.
More than a thousand built environment professionals attended the event at Convene Sancroft in the City of London, which included a keynote speech by Vistry chief executive Adam Daniels.
The conference comes at a potential hinge point for the industry as it looks to Andy Burnham’s new government for relief from mounting strains on viability, including increased regulatory barriers, a weak economy and the prospect of interest rate rises.
The day of panel discussions and fireside chats with industry leaders was opened by a speech from Building editorial director Chloe McCulloch, who unveiled a new report by the Building the Future Think Tank.
The report, called Seizing the Moment: How to Deliver Regional Regeneration in Britain, examines how renewed political ambition for regeneration can be translated into schemes that are genuinely viable and deliverable.
“Its message is simple: unless government and industry act now and act together, the prime minister’s ambition to deliver growth in every postcode could be lost,” McCulloch said.
How do we deliver the housing of the future?
The conference kicked off with a keynote speech by new Vistry chief executive Adam Daniels, who welcomed the government’s new equity loan scheme – but warned more needs to be done to help the housing sector recover.
Prime minister Andy Burnham announced details of the Your First Home initiative last month under which first-time buyers will be given financial help to buy a new home.
More details of the plan will be announced in this month’s Budget but the policy is expected to support 2.5% deposits, backed by 20% government-backed equity loans for prospective buyers purchasing a new build property from a developer signed up to the scheme.
“Your First Home will help confidence,” Daniels told the conference but added that firms needed “certainty” from government on the housing market.
I remain optimistic about the future of the sector. We know the UK needs more homes. It’s attractive to investors. The planning system is more predictable and responsive
Adam Daniels, Vistry
“[One] pressing question is whether projects can move through the planning system quickly enough. Planning reform is welcomed but certainty is more valuable than reform alone.”
Daniels, who was appointed in April, said the market was at its weakest since the financial crash in 2008 and 2009 but added that government initiatives to build more homes in the coming years were providing “glimmers of hope”.
“I remain optimistic about the future of the sector. We know the UK needs more homes. It’s attractive to investors. The planning system is more predictable and responsive.”
However, at a panel event focused on housing delivery, The Hill Group’s Helen Rieman insisted that first-time buyer support was “not a silver bullet”.
She said it would “hopefully” be enough to “make some traction” but that the government needed to combine fiscal policies with lower interest rates “for developers to really start getting that traction and confidence again in the marketplace”.
Rieman, who is business growth director at the builder, added that improving the speed at which section 106 agreements are reached would be another thing that could bring immediate relief to housebuilders.
In a debate on housing compliance and maintenance Richard Shwe, the executive director of housing and neighbourhoods at Hammersmith & Fulham council, said: “Getting into people’s homes is really important. I have corporate manslaughter responsibility. You have to show people you care, it’s not about tick boxing, it’s about creating good social housing.”
In the afternoon, attendees watched a fireside chat between HTA Design chair Ben Derbyshire and TIbbalds founder director Hillary Satchwell about the government’s new towns programme. In an informal discussion, Derbyshire and Satchwell discussed what new towns and large urban extensions should look like, how they can ensure consent through the planning system and how they can be delivered over many years and decades.
Derbyshire told the audience how, despite the often repeated claim that the general public dislike modernist design, the post-war new town of Hatfield offered a counter argument. “I went for a cycle through there the other day looking at the modernist - some would call brutalist - buildings housing. The locals love them!” he said.
Asked what he thought the most successful post-war new town had been, Derbyshire confessed his admiration for Milton Keynes: “The roundabouts may not be fashionable these days, but its urban planning has been largely successful in keeping traffic off the road”.
Building safety – from confidence to evidence
It may be more than four years since the Building Safety Act became law and more than two since the final elements of the new regime came into effect, but the debate about how well the industry is adjusting to it is still raging.
There is still this gap between being confident about what we’re actually doing and actually then having the evidence to back that up
Rachel Davidson, BESA
In a morning panel session, Rachel Davidson, director of specialist knowledge at the Building Services Engineering Association (BESA) cited a member survey showing 90% of respondents are “really confident” in meeting their BSA dutyholder responsibilities. However Davidson said when BESA asked further questions about how the firms evidence their compliance on day-to-day projects “the picture was less consistent.”
She said: “There is still this gap between being confident about what we’re actually doing and that we’re doing the right thing, but actually then having the evidence to back that up”. She said this is particularly a problem for older projects which were built under different reporting regimes.
Later in the session the panel moved on to the issue of building safety remediation costs and how they have the potential to move down the supply chain and put smaller firms out of business. Both Davidson and Clive Pople, pre-construction director at Kier Places, said smaller firms are being more selective about the contracts they sign as a result. Ben Smith, a partner at Fenwick Elliott, suggested government could make interest-free loans available to firms who are at risk of going out of business because of remediation costs.
The panel also talked about improvements with the pace of gateway 2 approvals, while noting there may be issues coming down the road from gateway 3.
Breaking down barriers to circular construction
A panel discussion circular design discussed how reusing materials can be applied in practice within the built environment’s increasingly complex regulatory frameworks. In a question and answer session at the end of the panel event, one fire engineer asked what his sector could do to support the circular design agenda.
“Yes. Sign things off,” said Orms associate director Rachel Hoolahan. “We’ve had a lot of challenges with fire engineers rolling back the level of commitment that they’ll give to their strategies, and that causes a lot of challenges. And I understand why, but it does create challenges for us because you say to them, ’Is this going to be okay as a plan of action?’, and they go: ‘Yeah, maybe I think so’. And that doesn’t fill us with confidence,” she said.
Hoolahan said specifiers need a “yes or no answer” to enable the use of reused materials in a project, but the industry has found itself in a “tricky period where everyone’s a bit hesitant and nervous”. Hoolahan recalled how she had attended a circular steel conference where insurers had expressed surprise at the level of due diligence which went into testing materials chosen for reuse. “We’re not just plucking a piece of steel off the street and lobbing it in the building. PI insurance is on the line here. We’re competent professionals, and so we’ll apply that competency to this.”
In the same session, Permasteelisa Group lead concept designer Hans Jansen was asked how long the existing glazing on The Shard will last before it needs to be replaced. Jansen did not give a figure but explained that reglazing The Shard and 22 Bishopsgate, two buildings with facades which were manufactured and installed by Permasteelisa, could be done from inside the building due to the double glazing panels, which age quicker, being installed on the inner side of the glazing system. The Gherkin, which has its double glazing on the outside, presents a more challenging reglazing job because replacing the panes would need to be done from the exterior.
Does AI help or hinder the skills crisis?
Is the future of construction about the latest AI tools or the people wielding them? This panel argued that while digital innovation is reshaping the industry, true success relies on developing human skills.
Carol Davidson, people development director at Gleeds, championed “adaptability” as the ultimate skill, urging leaders to foster cultures of trust and experimentation rather than relying on technology alone. She said: “We don’t need to be experts in all of these tools, But we need to give our teams the space to try them out, to experiment with them, give them permission to question what’s happening”
The impact of AI on staffing levels in construction is still a big unknown, Davidson said. She didn’t think the technology would impact the number of graduates entering the industry in the future.
“We’re still in the early stages of how AI will impact [those] roles. I don’t think it will. Maybe [that] question will be more relevant in five years’ time.”
She added: “It’s about having clear career pathways for people coming into the industry. If we stop doing that, we won’t have people who can take on those senior roles.”
Richard Davis of the Get It Right Initiative warned that we must not lose sight of quality fundamentals, insisting that digital tools should reinforce not replace the critical behaviours and rigorous inspection processes needed to eliminate costly errors.
He said: “I’m a big advocate of using digital tools correctly, But I don’t mind saying to an audience, ‘We need to get back to the inspection and test plan.’”
When considering young generations still in the school system as part of a discussion focused on housing delivery, Helen Rieman, business growth director at The Hill Group, said that “the optics” of the government considering the introduction of construction GCSEs was “a really good signpost of their commitment to it being a serious career path”.
Data centre construction slower in UK as they face “PR battle”
One of the final panel sessions of the day saw a lively debate on data centres and the challenges facing their construction in the UK.
Nick Bishop, critical facilities practice area leader, Europe and senior associate at Gensler, said: “I think it’s evident that the speed [of data centre development] is a lot slower in the UK, in terms of the process, approvals, the timeframes, and all of the different criteria and level of consultancy required to get a design approved”.
This was echoed by Paul Connolly, director of technology at Mace Construct, who said there are a number of factors, including power grid connections and water, along with capability and capacity that are challenges to development of data centres. He said data centres have “got to be treated as critical infrastructure, similar to hospitals, roads and other things [in order for people] to get on board with it.”
The discussion talked about data centres’ PR problem and the extent to which their use of water is overstated. Andreaa Tudor, digital infrastructure project manager in design and construction at Equinix, argued there may be opportunities to put the heat generated by data centres to good use.
“The latest data centre we had in Milan, we used the excess heat…to heat the community next to it, and we’re talking about 21,000 homes.”
Despite the challenges, however, Connolly said there are between 4,000 and 5,000 data centres planned in the UK and he believes there’s a good chance more than half will be built.
What deregulation trade-offs can boost housing delivery?
Rob Perrins, executive chair of Berkeley Group, argued that regulatory requirements add roughly £160,000 to the cost of a London flat, making projects harder to deliver and limiting the scope for affordable housing. He called for trade-offs among competing planning demands, saying, “you’ve got to make compromises. You’ve got to decide what is your priority”.
He said during a fireside chat with Build UK’s Suzannah Nichol that cutting £100,000 in costs would enable more cross-subsidy for affordable homes, while also calling for a cut in the time it takes to get planning approval, noting that the average timelines for major housing schemes in London have increased from six to nine years.
Perrins criticised the complexity around section 106 agreements, saying “why is section 106 negotiated individually on every single contract? There must be some core principles”.
He identified stamp duty as a major blocker on the demand side, saying it was uncompetitive in London and was slowing movement in the market for first time buyers and downsizers.
In a pointed challenge to the government’s housing targets, he argued more focus should be on how publicly owned land is developed: “40% of land in London is owned by the state. So get on and build your own land, don’t come and give me a hard time.”
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Seizing the Moment: How to Deliver Regional Regeneration in Britain
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