Summer Newsletter 2024

In this issue:
  • Martin Arnold Spring Social
  • Project Case Study: Plashet Road Passivhaus
  • Tender Price Index Update
  • Project Case Study: Ironmonger Row Baths
  • The Building Safety Act: The New Principal Designer Role
  • Constructing Excellence SECBE Awards 2024
  • Summer Conference Season Roundup

Martin Arnold Spring Social

Martin Arnold are committed to making a positive contribution to our local environment and to the communities we work in, through both our projects and as part of our overall ESG strategy.

On 19 April 2024, we held our annual practice Spring Social which involved a 7km litter picking walk along the River Thames. 60 members of our team set off from our office in the Royal Arsenal and headed west towards Greenwich.

Armed with the right equipment for litter picking, including grabbers and gloves, we spent nearly four hours walking and cleaning up rubbish, not only delivering benefits to the environment but also boosting our team’s physical and mental wellbeing. Despite it being a dirty job, everyone seemed to have fun along the way, which also helped boost our team spirit!

Litter picking isn’t just about tidying up, it’s about raising awareness of waste issues and promoting responsible habits in the community. Martin Arnold are keen to continue to inspire each other to reduce, reuse, and recycle, and keep our surroundings clean!

Plashet Road PassivHaus Project

We are delighted to announce the successful completion of a flagship scheme of 65 Affordable Rent homes in Plaistow, in partnership with the Mayor and Burgesses of London Borough of Newham. Our team provided Employer’s Agent, Principal Designer, Clerk of Works, Party Wall Surveyor and Quantity Surveying services.

Celebrated for its exceptional architecture and Passivhaus design, the development offers much-needed affordable housing and has made a significant impact by prioritising sustainability. The result is a scheme which lowers energy bills for residents, ultimately combating fuel poverty and working towards Net Zero.

It has been a privilege to contribute to such a transformative project and we look forward to continuing to deliver sustainable homes in the future. Find out more about the project on our website: www.martinarnold.co.uk/project/plashet-road/.

Tender Price Index Update

Tender prices in Q2 2024 rose by 0.3% when compared to the previous quarter, resulting in an annual growth of 2.1%. This represents a continued reduction in the rate of annual price inflation when compared to Q2 2023. The easing in tender price inflation can be attributed to these three factors:

  1. Supply chain stabilisation: After the disruptions caused by the pandemic and the war in Ukraine, supply chains are gradually stabilising. Material availability has improved, leading to more predictable pricing.
  2. Labour market dynamics: While labour shortages persist, the rate of increase in site rates has slowed down. Contractors are adjusting to the new normal, balancing workforce availability with project demands.
  3. Market sentiment: The uncertainty surrounding the political landscape has influenced investor confidence. Some projects are being delayed or scaled back, impacting tender prices.

This trend of moderate growth should persist throughout the remainder of 2024, with annual growth in tender prices projected to fall further, reaching just 1.5% by the end of the year. Quarterly increases seem to be stagnating at 0.4%, however this is forecast to rise to 1.0% for the first two quarters of 2025.

Material costs have shown decreases for the past two quarters and are forecast to drop further by 0.8% in the next quarter. Steel prices are stabilising, however there are continuing issues with the cost of concrete and M&E products, as well as overall costs still being high. Over the next five years material costs are forecast to grow by 13%. The key drivers of material cost increases include global supply chain challenges and escalating energy prices.

Growth in labour costs are expected to continue, with an increase of 6% on the previous quarter and a forecasted increase of 18% over the next 5 years. Rates have been rising in line with inflation, although the pace of annual growth in labour costs is expected to slow down. Increasing the quantity of skilled labourers, improvements in technology and productivity, and balancing labour costs with productivity gains will be crucial for maintaining project profitability.

Total new work output decreased by 0.9% in the last quarter, when compared with the previous. New work output is down 1.8%, whilst repair and maintenance has continued to increase by 0.3%. This overall decrease reflects the ongoing challenges faced by the industry, including:

  • Public sector investment: Infrastructure projects, such as transportation and energy initiatives, continue to drive growth. However, delays in funding allocation and project approvals have impacted output.
  • Residential sector: Despite robust housing demand, affordability constraints and supply chain disruptions have affected residential construction. Developers are navigating material shortages and labour availability.
  • Commercial and industrial construction: Office spaces and logistics facilities are adapting to changing work patterns and e-commerce trends. However, uncertainties surrounding office space utilisation and remote work policies have influenced output.

So far, 2024 has seen a decline in total output to date. There is a predicted return to growth in subsequent quarters, with total new work output forecasted to grow by 21% between 2024 and 2029.

Despite emerging from a period of rampant inflation, the construction industry now faces challenges due to falling demand and stagnating output. The unfavourable investment climate, combined with the uncertainty of a looming general election, continues to impact growth.

Case Study: Ironmonger Row Baths

After a fire in January 2022 severely damaged the Ironmonger Row Bath’s basement, Martin Arnold were appointed to oversee the restoration in the role of Design Coordinator. Located in St Luke’s Conservation Area, this historic building has been revitalised with new internal and external features, enhancing both its function and safety.

The Baths, originally designed by AWS Cross Architects in 1931 and expanded in 1938, now boast a transformed internal space with a new reception area, upgraded saunas, and improved fire safety measures, including an additional smoke ventilation shaft. The Baths were fully reopened to the public in January 2024. Find out more about the project on our website: www.martinarnold.co.uk/project/ironmonger-row-baths/.

The Building Safety Act: The New Principal Designer Role

Following a six-month transitional period, the regime of the Building Safety Act (BSA) is now in effect. Alongside introducing a number of building safety related regulations, a new Part 2A has been inserted into the Building Regulations 2010 introducing 5 new designer duties and 2 new general duties. This includes the role of the Principal Designer under the BSA, a role that is distinguished from the Principal Designer role under the CDM Regulations 2015.

There has been some confusion about when Principal Designer under the BSA is required on a construction project. The Act stipulates that a Principal Designer BSA must be appointed for any project that is subject to the Building Regulations, not just projects involving Higher-Risk Buildings (HRBs).

For legacy projects:

  • Where a project has been registered with a local authority before 1st October 2023 for Building Regulations and significant work began on site before 6th April 2024, no Principal Designer under the BSA is likely to be required as this project would fall under the old rules.
  • Where a project has been registered after 1st October 2023 and work on site started after 6th April 2024, a Principal Designer must be appointed. For HRBs, a Principal Designer under the BSA should be appointed when the Building Regulations submission is made.

The new Principal Designer BSA role will be in addition to the Principal Designer role under CDM 2015. However, the same organisation or individual will be able to perform both roles. Should the client not appoint a separate Principal Designer under the BSA, this responsibility will fall to the designer in control of that design phase. Ideally, the Principal Designer BSA should be appointed as soon as the design work commences; the mandatory time for this role to be in place is before the project goes to site. However, for projects involving Higher-Risk Buildings, the Principal Designer BSA should be appointed when the Building Regulations submission is made.

The responsibilities of the Principal Designer BSA are to:

  • Plan, manage, monitor and co-ordinate matters related to the design work.
  • Take reasonable steps to make sure all designers comply with their duties under Building Regulations.
  • Obtain declarations from each stakeholder and design team member to confirm they understand and have fulfilled their duties as designer in compliance with the Building Regulations, prior to any Building Control submission.
  • Assess design work to make sure all designers produce designs that comply with relevant Building Regulations.
  • Work with the principal contractor and share information about planning, managing, monitoring and co-ordinating the design and building work.
  • Assist the client in providing information to others, if requested.

In other words, the new Principal Designer dutyholder must take ‘all reasonable steps’ to ensure the design work on a project is co-ordinated to demonstrate compliance with the Building Regulations. Although individual designers remain responsible for the compliance of their own design work, the new Principal Designer will have overall responsibility for co-ordinating the design and must only accept commissions where they have the ‘skills, knowledge, experience and behaviours necessary to fulfil their duties’.

Where the project involves a HRB, the Principal Designer has the following additional duties to:

  • Establish and operate a mandatory occurrence reporting system.
  • Submit mandatory occurrence notices and reports to the Building Safety Regulator.
  • Store the required information about the building (also known as the Golden Thread) and provide it to the client and the principal contractor as necessary.
  • Keep and share with the client the steps taken to make sure those appointed to do design work meet the competence requirements.

Constructing Excellence SECBE Awards 2024

We are honoured to have had two of our schemes, the Regeneration of the Friary Park Estate in Acton (left) and Gary Court in Croydon (right), shortlisted for awards at the Constructing Excellence SECBE Awards 2024. Friary Park was shortlisted in the ‘Integrative and Collaborative Working’ category, and Gary Court was shortlisted in the ‘Residential Project of the Year’ category.

Although we did not win in these categories, we are incredibly proud of the recognition our projects received. Our heartfelt congratulations go out to the winners and all those who were shortlisted. We would also like to thank the organisers of the Constructing Excellence SECBE Awards for this opportunity and for recognising the hard work and dedication of our team.

Thank you to everyone involved, and congratulations again to all the winners.

Summer Conference Season Roundup

Whilst the weather has not necessarily felt all that much like summer, Martin Arnold has been trying to make the best of it at the various housing conferences this year.

At the CIH’s Housing Conference in Brighton in May, the focus of discussion and debate centered on the various pressures affecting the housing sector and its ability to deliver a strong pipeline of new and vital affordable homes. Hyperinflation, high interest rates, changes in legislation, building safety and contractor insolvencies are all creating a very challenging environment for affordable housing providers to operate in.

Despite the challenges, many of the people we spoke with had positive feelings about the future with interest rates stabilising, a possible change in government ahead and many discussing public and private partnerships to manage risk and share reward whilst delivering the crucial homes that the country needs.

At the end of May, our delegates travelled up to UKREiiF for the annual real estate forum, where Managing Director Roger Arnold took part in a panel discussion on joint ventures and Director Ben Davis spoke on the ‘Enhancing Building Safety’ panel with the esteemed Dame Judith Hackitt.

Despite the terrible weather during UKREiiF, the delegates were not deterred and the announcement of the general election provided an exciting twist to the sessions and the discussions that took place over the three days!

To complete the trio of conferences, we are preparing for the Housing Community Summit in September in Liverpool. Billed as a groundbreaking collaboration between the Chartered Institute of Housing (CIH) and the National Housing Federation (NHF), we are looking forward to taking part in the debate to actively shape the future of social housing alongside the other delegates and politicians who have already confirmed their attendance.

If you are attending the Housing Community Summit on 9-10 September, please get in touch at ma@martinarnold.co.uk. Delegates from Martin Arnold would be delighted to meet up.