Winter Newsletter 2022

In this issue:

Martin Arnold would like to wish all of our clients and colleagues a very Merry Christmas and a Happy New Year.

Our offices will be closing for the Christmas Break on Friday, the 23rd of December and reopening on the 3rd of January, 2023.

2022 Unwrapped

2022 was a year of major changes.

We celebrated the Queen’s Platinum Jubilee and then the ascension of King Charles III.

Boris Johnson was replaced as Prime Minister by Liz Truss who was then replaced by Rishi Sunak. The position of Secretary of State for Levelling Up, Housing and Communities passed from Michael Gove, to Greg Clark, to Simon Clarke, and then back to Michael Gove while the Minister of State for Housing & Planning changed hands 5 times.

And, after 56 years of hurt, the Women’s team brought football home for the 2022 Euros.

There were significant changes to the construction sector too.

In response to the new Fire Safety Bill, the BSI published PAS:9980 to help building owners meet the requirement to ensure that a building’s external wall system is checked during a Fire Risk Assessment. PAS:9980 guides the Fire Risk Assessment of a building through a consistent, five step approach to determine if remedial work is necessary in the individual context of each property.

New Building Regulations came into force in June. Under the new rules, CO2 emissions from new homes in England will need to be 30% lower than currently allowed while all other new buildings, such as offices and shops, will need to produce 27% less emissions.

The Building Safety Act also came into affect in June. The Building Safety Act is designed to introduce a more rigorous system of collecting and collating information, as well as accountability, and will have significant impact on any schemes developed by any social housing provider moving forward.

2023 looks like it will see a number of new laws and regulations that will have an effect on the construction sector, most notably the Levelling-up and Regeneration Bill. This will have an impact on a number of areas, including: town and country planning, the Community Infrastructure Levy, the imposition of Infrastructure Levy, regeneration, the compulsory purchase of land, and the governance of the Royal Institution of Chartered Surveyors.

In addition, laws about HR, immigration, and clean air will see companies needing to adapt the way they conduct their business in order to remain compliant.

Case Study: Icona Point

Following a review of the external wall systems at Icona Point, numerous fire safety issues were identified requiring works to the unitised curtain wall system, rendered EWI system, and balconies. Martin Arnold was appointed for the management of these works, which involved the provision of Contract Administration, Clerk of Works, and Principal Designer services.

Appointed from the project outset, Martin Arnold provided initial assistance in inspecting and reviewing the external wall systems working alongside the Fire Engineer and subsequently carried out the design and specification, obtained the relevant statutory approvals, and managed the procurement of the works including a single stage competitive tender.

The works included the replacement of combustible insulation to the unitised curtain wall system, full replacement of the rendered EWI system, and replacement of timber decking to a non-combustible substitute.

Monitoring of the works was conducted by Martin Arnold as Contract Administrator and Clerk of works throughout to ensure a high standard of workmanship was achieved and maintained, ultimately leading to a quality delivery at handover, and an external wall system safe for the building occupants.

Challenges:
The development being positioned alongside the railway added additional challenges, specifically the requirement to enter into a Basic Asset Protection Agreement (BAPA) with both Network Rail and TFL prior to work commencing to the relevant building elevation. This required a collaborative approach between all parties of the project to ensure the required information was supplied to both of the rail operators, enabling obligations to be discharged and works to progress.

A further challenge identified pre-contract was related to the removal of the façade panels to the unitised curtain wall system. Due to the original construction sequencing, the panels could not be removed via the fixings alone. To overcome this, Martin Arnold developed a solution to remove and refix the panels which involved cutting the panels at specific locations where essential to allow for removal. Subsequently, following replacement of the combustible insulation, bespoke aluminium cover strips colour matched to the existing panels along with an appropriate sealant was utilised to make good the joint during re-instatement.

Joint Ventures: A Solution to the Housing Crisis

Martin Arnold recently took over The View in Holburn for the much-anticipated return of our Autumn Seminar.

A host of professionals from the housing sector attended to hear insights into the Joint Venture approach to development partnerships, with expertise and knowledge shared by Roger Arnold and Chris Martin from Martin Arnold; Jacqueline Esimaje-Heath, Growth Director at L&Q; and Jonathan Corris, Partner at Devonshires Solicitors.

Within the context of the current economic climate, the seminar provided a timely opportunity to examine the evolution of the Joint Venture [JV] model over recent years and explore the benefits that working in Joint Venture partnership can bring in these challenging market conditions.

The panel demonstrated how to analyse whether a project or opportunity is suitable for a JV, how to pick the right partner to maximise your opportunity and how to manage your risk during the JV process.

The panel included some pragmatic advice on how to make JV’s successful and the benefits of delivering housing in this model. The panel also shared some key advice on how to stress test your JV model to ensure that it is robust enough to deal with difficult market conditions and how to put processes in place to ensure that you are protected if the JV is no longer viable or not working.

We would like to thank Jacqueline and Jonathan for their time and for sharing their invaluable perspectives on the topic and thanks also to those delegates who attended and engaged with our panel to produce some thought-provoking discussion.

If you were unable to attend the event but would like to know more, or have us bring the presentation to you, please contact us at events@martinarnold.co.uk.

Case Study: Mote Park Centre & Café

Set in Maidstone’s 440 acre Mote Park the Mote Park Centre project is part of the second phase of investment of facilities in the park by MBC. Acting as Employer’s Agent and Principal Designer, Martin Arnold were appointed by Maidstone Borough Council [MBC] for the construction of a new Café, flexible learning & community space, accessible changing facilities and estates services building.

Martin Arnold were appointed by MBC following their receipt of Planning Approval and worked with MBC’s procurement team to tender the project locally through the Kent Business Portal. Using a best value tender strategy, bids were assessed on quality and price and the project was awarded to BBS Construction, part of the Chartway Group.

The project entailed the demolition of the existing café, toilet block and estates services buildings, all of which were live operating buildings with specific services that are fundamental to the smooth running of the park.  Using a phased approach, supplemented by temporary facilities and by building a collaborative team we co-ordinated the construction activities with the operational functions of the park to successfully deliver the project.

The new estates services building was delivered first, to allow MBC’s Parks Team to de-cant their existing facility into the new building that had washing & changing facilities and a canteen and kitchenette. The building’s green credentials also meant that it was constructed with PV arrays and EV charging stations and is an all-electric building.

The café was delivered next, using Partial Possession, we were able to allow MBC’s catering tenant early access to the new café and kitchen so that they could instruct their fit out contractors to start the installation of the commercial grade kitchen and to prepare the servery and counter zones, as well as furnish the café eating area.

Lastly the new toilets, Changing Places accessible changing facility and flexible learning and community space were delivered to complete the project.  The accessible change and toilet will now mean that everyone, regardless of their access needs or disability or reliance on the assistance of carers or specialist equipment, can use a toilet facility with dignity and hygienically in Mote Park. The flexible learning and community space has been earmarked for a number of community led activities and will be available for education, courses and local learning.

The striking buildings not only look fantastic, but they have also achieved BREEAM Very Good and it is hoped that they serve the community and visitors to Mote Pak well.

One of the key challenges was delivering the striking design of the buildings’ elevations, a mixture of glass, zinc seamed cladding and Accoyoa hot and miss cladding, whilst not compromising on the need to create a robust and secure building that sits in the middle of a 440 acre park.

Through design development with the client and contractor working collaboratively a number of measures were used together to create as secure a building as possible without compromising the sleek lines and finishes of the building.

By using integrated roller shutters, hidden within the Accoyoa and zinc cladding, supplemented with high level vandal resistant glass and CCTV and alarm systems we were able to provide large glass elevations for users of the cafe to get full and varied views of the park during the day, whilst leaving the building secure at night.

Tender Prices & Market Commentary

The construction industry continues to be under pressure despite the observed decline in inflation and the decline in the overall economy. While inflation has evidently slowed down, it continues to affect the tendering process especially with regards to long term commitments. With the inevitability of recession in the UK economy, contractors would most likely be inclined to be more flexible in ensuring their future order books, while clients would have to adjust their expectations and potential profit margins should they continue to deliver in the current market conditions.

The government has previously stated their commitment to infrastructure investment in the way of steering some economic growth and boosting the wider economy. The long-term forecast for new construction input is mainly reliant on infrastructure to provide some growth with most other sectors either stagnant or declining from previous peaks.

The near-term growth predictions following the Autumn statement anticipate unfavourable investment climate for new housing, new commercial and new industrial, while increased spending is expected on energy efficient retrofit under Repair and Maintenance to Housing, increased spending due to lack of new work investment under Repair and Maintenance to Infrastructure and increased funding announced for health and schools under Repair and Maintenance to Public non-housing.

Other factors that are ought to affect the construction industry and construction costs going forward are the Proposed Bills currently going through Parliament – the Carbon Emissions (Buildings) Bill, Green Belt (Protection) Bill, Healthy Homes Bill, Housing Standards (Refugees and Asylum Seekers) Bill and Minimum Energy Performance of Buildings Bill with the Carbon Emission and the Minimum Energy Performance bills anticipated to have the greatest impact on the construction sector.

The previously observed spikes in materials’ prices seem to have slowed down and seem to be plateauing currently with the ongoing supply and demand somewhat trying to reach a balancing point while the UK economy officially enters a recession. The bit of good news is that some analysts consider that the UK has passed the peak of inflation and it is anticipated that by the middle of 2023 inflation will fall sharply and will be returning to long term trends by 2024.

BCIS panel is reporting that materials price increases are slowing, with the inputs that continue to see some inflationary pricing being steel, concrete, plasterboard, insulation, and some specialist labour. While materials prices are seeing decline from the peak, labour cost increases are likely to persist for some time yet with anticipated return to trend by 2025.

Material supply does not appear to be a significant issue any longer and logistical challenges seem to have been mostly resolved while transport costs are still volatile.

The quarterly BCIS TPI sits at 1.4% increase from the previous quarter with the next forecasted quarter at 1.1%, showing the slowdown in prices. Annual TPI increased by 7.8% between 4Q2021 and 4Q2022.

The construction industry remains volatile with the total output just reaching pre-pandemic level and new work sill below 2019 levels. GDP forecasts for 2023 sit at -1.5% and for 2024 at -1.0%, with a minimal recovery anticipated in 2025.

Stagflation has been mentioned by several experts as a possible representation of the current market conditions not only for construction but for the wider economy, where little to no growth coupled with high inflation manifests a very poor environment for construction investment.

The length and depth of the predicted recession is still to be fully understood and assessed but some analysts are mentioning 2025 as the year where the construction sector would start enticing some minimal growth, but it wouldn’t be until 2027 when some real growth would be noticed.

In the short-term, contractors are thinking more carefully about turning down tender opportunities and trying to implement mitigation measures by pre-ordering materials and introducing clauses within the JCT to cover certain materials that are expected to increase exponentially, while some clients have taken a pragmatic approach to pay for materials in advance. While all the above has been currently implemented, the pressure on contractors’ margins remains.

Case Study: Elmhurst Mansions

Martin Arnold were appointed by London and Quadrant Housing to manage the structural repair and refurbishment of these cantilevered concrete slab balconies situated at the rear of a pair of Victorian mansion blocks, located in a residential area close to Clapham High Street.

The balconies were in a poor state of repair, suffering from cracking to the concrete and corrosion of the existing steel reinforcement. Our appointment included acting as Contract Administrators, Principal Designers and Party Wall Surveyors. We produced the specification of works, managed the tender, drafted the JCT contract and managed the works through to a successful completion.

The remedial works involved the installation of a new structural steel frame underneath the balconies as well as structural repairs to the balconies themselves, including new reinforcing steel ties and resin injections to encapsulate the existing reinforcement.

A new three stage waterproofing system was then applied to the top of the concrete slabs, providing a waterproof and non-slip surface. Finally, the original metal balustrades – which had rusted beyond repair – were replaced with new, powder coated steel to reduce long term maintenance. While the scaffold was in place, the client also took the opportunity to carry out brickwork repairs and repointing to the building.

The works will provide a long term solution with low maintenance requirements and will provide the residents with a much improved outside space to enjoy.

Challenges:The project provided a number of challenges which required careful management and planning, these included:

  • There was no access available to the rear of the buildings, with the only way or getting materials onto and waste off of site being via an up and over scaffold.
  • The balconies were a party structure, jointly owned by the client and owners of the adjoining buildings, meaning that complex Party Wall agreements were required.
  • During the course of the works, a number of additional items of repair were identified and remediated.

Martin Arnold Are Victorious

Martin Arnold recently took part in L&Q’s football tournament, an annual event held to raise money for L&Q’s mental health football team, L&Q Living FC.

Teams playing in this year’s tournament included L&Q Living FC, L&Q staff, BPM, Calford Seaden, Hill and Martin Arnold.

After a fiercely competitive day, Martin Arnold were crowned the tournament’s winners.

More importantly, the day raised £5,500 which will go towards helping L&Q Living FC to buy new kits as well as pay for travel to matches, pitch fees and equipment.

We look forward to defending our crown at next year’s tournament!

In other fundraising news, we are delighted that our Jim Martin has managed to beat his original target of £1000 for his Virtual Marathon by a massive 230%, with nearly £3,500 donated (so far) for the fantastic Pilgrims Hospice.

The Pilgrims Hospice is dedicated to providing skilled and compassionate care, free of charge, to people living with an incurable illness in east Kent. They care for over 2,500 patients a year, at their 3 inpatient units in Canterbury, Thanet & Ashford, their therapy centres, or in patients’ own homes. With 80% of their funding being voluntary contributions, your support cannot be overstated and we would like to thank everyone who has donated for their support.

If you haven’t donated, there is still time to do so by clicking on this link: https://www.justgiving.com/fundraising/jim-martin-mayor-of-hythe