Planners Panic While Construction Costs Continue to Soar

Wednesday, November 4, 2015

I hate it when my clients are worried. Of course, some worry is normal – be it a renovation or a new build, these projects are amongst biggest investments they will ever make and reassuring them is half my job. But this past year I’ve noticed they’re especially anxious, and they have every reason to be.

At the heart of their fear is the rise in construction costs. The hard truth is that a new client who walks into my practice today will get less for their money while taking on more risk than one whose project has just finished.

Yet, despite record costs, demand for architects continues to rise. Why?

Though costly, renovations and new builds are still a more attractive option than buying a new house for many home owners, especially in London where prices are notoriously high. Even those who are buying are likely to look for a high value fixer-upper instead of a fully fitted and refurbished house.

This self build surge has overwhelmed planning departments. Applications are at a ten year peak while local authority staffing cuts have left less hands on deck. Never in my life have I experienced planning officers being so picky and unpredictable, blocking projects and tightening regulations to restrict the amount of approved builds. Their pettiness has brought my clients to tears.

Meanwhile, contractors are having the time of their lives. During the recession, firms were lucky to break even, struggling to keep their teams together while demand slowed to a crawl. Just about any project would have a queue of high quality contractors lined up to take the job.

Now, not only is the self build market hungry for their services, the high end construction industry currently swarming the London skyline with cranes is willing to pay above on beyond the going rate to suck up the best talent – from electricians to concrete pourers and steel workers.

As a result, contractor fees have gone up by as much as 15% year on year and instead of having to queue for jobs, their order books are full for months on end. Newcomers are emerging to fill the gap in the market but are yet unproven, their high value balanced against the risk that they can’t deal with commercial pressures.

The interior design industry is joining in on the fun as well, doing twice yearly price rises and demanding 50-75% deposits upfront. Order numbers are at record highs thanks to the renovation craze and the insatiable appetite for new technologies.

As is often the case, their popularity has made them harder to deal with. Why would they put special effort into one order when it’s a drop in the pond amongst 500,000 others?

You can see that this game has many players, few of which are on the side of the self builder. As a domestic architect from day one,  I’ve always fought in the corner of those people who believe in building their own home – what I consider the truest and most intimate of architectural expression.

So to help you combat these rising prices and increasing risks, I’ve introduced a new service to DGA: the Feasibility Study. This service puts the full force of DGA’s experience and expertise behind you before you make any commitments.

Instead of trusting estate agents eager to make a sale or contractors determined to downplay the danger, you can rely on our impartial advice on the costs, risks and feasibility of your plans. Hopefully this will mean less heartbreaking meetings telling clients the home they just bought has no chance of being turned into the home of their dreams.

In the next blog I will provide a full introduction of the Feasibility Study, including how much it costs and what you get. I can’t wait to tell you more.

John Dyer-Grimes