Building safety works in the time of COVID-19: how HAs are responding

As Mark London, partner at Devonshires, explains: “This will not only increase the cost of development, but it will also increase the maintenance cost of sprinkler systems going forward because these systems can cost quite a bit of money to manage over the lifetime of the building.”

What will be expected of existing buildings, however – which this amendment does not cover – is where much of the anxiety about cost is focused. Critical to this concern is the Fire Safety Bill, which will require invasive inspections of external wall systems and front doors to individual flats on all multi-occupancy and multi-storey buildings.

As Mr London says: “A lot of housing associations and local authorities are having to cope with the very significant challenge of having to carry out inspections on their buildings over 18m, and they are now having to grapple with the prospect of doing it with all their other buildings.”

Jamie Ratcliff, executive director of business performance and partnerships at Network Homes, puts this into perspective. “It’s not only unknown what standards you’re trying to bring buildings up to, but also how many buildings are in scope and if we are going to be doing intrusive surveys on every single building at some point then the cost could be really, really significant and much higher than we [the G15] have come up with.”

The bill is currently working its way through parliament, with sector players anticipating it to be passed just before the summer recess or in the autumn. In the meantime, many associations are taking a risk-based approach and doing works on their buildings regardless.

One such organisation is L&Q. Fiona Fletcher, director of development and sales at the group, says: “We’re taking a risk-based approach and doing work on anything that needs it, whether it’s 18m, 11m or ground floor.”

She adds: “If you look at putting together the building safety case, the government thinks that’s going to cost £8,000 per block and our work is averaging about £40,000 per block.”

Richard Petty, lead director at JLL’s Living Advisory, says that one registered provider (RP) was paying £10,000 per flat to address remedial works such as fire door installation. That included the preliminaries, contract and delivery of works.

The problems plaguing the mortgage market – with banks unwilling to lend money until leaseholders can prove their cladding is safe or removed – have not gone away other. The Royal Institution of Chartered Surveyors’ External Wall System 1 (EWS1) form is designed to make it easier to value properties that are experiencing limited success.

Mr Petty says: “EWS1 needs to be reassessed and one of two things needs to happen. Either the government puts its own warranty behind it, saying that it would fall on a government indemnity rather than your [professional indemnity], or it needs to be redrafted so it’s less binary.”

Elsewhere, the government’s Building a Safer Future regime will usher in further changes for the sector, for which it will legislate through the Building Safety Bill (although this is not expected to be enshrined until 2021).

As part of this, a national Building Safety Regulator is being established in shadow form by the Health and Safety Executive. The regime will also insist on clearly identifiable duty holders at each stage of the building’s life, responsible for the safety of residents.

On the risk transfer between client and contractors under the duty holder regime, Ms Rees notes: “[Dame Judith] Hackitt’s recommendations demand an engaged and competent client with visibility and sign-off of all areas of the design and construction. The duty holder will only be liable if they haven’t discharged their duties, one of which is to employ competent people to design and construct, work, manage and maintain a building, so liability will only accrue if they haven’t employed competent people. If you’re a client and you’re unhappy with that liability, then make sure you are satisfied with the competency of the people you have employed or don’t build it.”

Improved data on building stock will also be critical for RPs, and is something the sector is already exploring. Technology company Plentific, for example, is working with RPs including Peabody and Notting Hill Genesis on a new platform called PropertyLab, which hopes to streamline the compliance process.

Cem Savas, chief executive of Plentific, says the group is developing a single standardised platform to bring together and automate all aspects of the compliance process, while giving tenants more control over their homes in areas such as repairs.

Elsewhere, Colin Farrell, senior partner at Faithorn Farrell Timms, has been looking at the financial impact of these fire safety changes under the new regime – particularly for high-rise and higher-risk homes.

He says: “We’ve done some work for a couple of different organisations to look at the implications on management and maintenance cost for running this new regime and what that means in terms of viability at development and appraisal stage, or operating viability when we’re looking at [net present value] calculations and the performance of existing assets.”

This work has shown that the cost of managing high-rise stock could be 2.5 times higher than the cost for a low-rise flat or a house because of the prices of regular fire door tests, fire risk assessments and additional management. This could stretch the viability of RPs with large amounts of high-rise stock, Mr Farrell adds.

All these concerns point to how extensive government support is going to be. In May, the government published its prospectus for a £1bn fund for the removal of non-ACM cladding on buildings of 18m or taller in the private and social sectors. This adds to the £600m previously made available for the removal of ACM cladding.

But there are a number of areas that this funding does not address. First and foremost, the cost of remediation goes far beyond cladding. As a Manchester City Council spokesperson puts it: “Any fund must also cover the cost of other fire safety works such as poor construction – including inadequate compartmentation, inadequate or poorly installed fire barriers, and fire doors which do not meet building regulations.

“On top of the building works, the fund ought to cover the cost of waking watches. Unless a fund looks at each building holistically, leaseholders could be put in a position where they are being burdened unfairly for the cost of remediation works.”

On waking watches, Theresa Mohammed, partner at Trowers & Hamlins, says that one of the lowest costs she has seen for fire wardens and fire safety in central London is around £3,500 a week, per block.

Further costs have also been accrued as a result of inadequate waking watches – some of Trowers’ clients have had to decant their tenants where waking watches have been deemed unacceptable for extremely vulnerable tenants, Ms Mohammed adds.

In terms of eligibility for the £1bn fund, concerns have also been raised about the “affordability tests” required. Many in the sector are worried that RPs with large surpluses would not pass this test.