Company says problems have raised concerns about ‘future revenue stability across the sector’ as contractor turns in improved profits
Hertfordshire contractor HG Construction is the latest firm to raise worries about the impact of new safety legislation slowing down residential jobs.
The company, which specialises in high-rise housing and student accommodation work for clients including Argent Related and Clarion, said the challenge of dealing with the new approvals process and compliance requirements had been “compounded by the resourcing constraints faced by the newly appointed regulatory bodies, leading to widespread delays and heightened uncertainty”.
Chief executive Adam Quinn added: “Consequently, commencement of new projects slowed noticeably, raising concerns about future revenue stability across the sector.”
Last week, the chief executive of Homes England called on the government to fix delays at the Building Safety Regulator as he described gateway 2 approvals as “unacceptably slow”.
Eamonn Boylan told Building that widespread hold ups on high rise housing schemes caused partly by a lack of resources at the regulator was “something that the government needs to resolve”.
Around 75% of applications for higher risk schemes, which includes residential buildings above 18 metres, are still being turned back by the regulator at the gateway 2 stage for pre-construction approval.
The regulator recently said the delays, which are causing turmoil in the residential sector, were caused largely by flawed or incomplete applications. But industry professionals have pointed to a lack of clear guidance from the regulator.
In a note accompanying HG’s latest accounts, which were signed off last week, Quinn said the new rules had “introduced significant disruption and complexity”.
Meanwhile, HG said that revenue last year slipped 9% from 2023’s record of £424m to £387m although HG said the move was “deliberate” and “enabled us to prioritise operational efficiency and high-quality delivery, resulting in a significant improvement in profitability”.
Pre-tax profit for the year was up 48% to £9.5m with the amount of cash HG had at the end of last year staying flat at £34m.
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