Replans to delay schemes totalling more than 2,500 homes and hit viability
Housebuilder Hill has taken four major residential schemes back to the drawing board totalling over 2,500 homes due to new requirements to add a second staircase to residential blocks of more than 30 metres.
Andy Hill, chief executive of £716m-turnover Hill Group told Building Design’s sister title Housing Today the requirements for a second staircase, which are out for consultation across England but have been brought in already in London, were causing delays of at least six months per development and would hit the viability of schemes.
The news comes after a raft of major developers and associations, including Clarion, Peabody, Landsec and Berkeley Group, have said the new rules, which are being brought in to improve fire safety in the wake of the Grenfell tragedy, are causing them to put schemes on hold.
Andy Hill said the four major partnerships schemes, all of which received planning permission before Christmas, were on hold pending a redesign to incorporate the new requirement for a second staircase on blocks over 30m, or six storeys, even though it still isn’t clear exactly what form a second means of escape will have to take, and where it will need to be positioned.
He said that redesign work so far undertaken indicated that as a “rule of thumb”, incorporating a second staircase reduced the saleable area of a development by around 4%, meaning the requirement will have a direct equivalent impact on a developer’s bottom line. “There’ll be a hit on the business from this, a hit on the bottom line. It’s very difficult.
“Obviously the regulation is understandable, but the industry is being hit so hard at a time when it’s struggling anyway.”
The government is proposing to introduce the requirement across the UK, but London mayor Sadiq Khan announced in February that the rule would apply in the capital with immediate effect.
Hill added that continued uncertainty over exactly what regulations would be implemented was further hampering progress, with different developers coming up with different solutions as to what form the second means of escape will take. This was being compounded the Greater London Authority’s deputy mayor for housing Tom Copley warning that City Hall has not ruled out reducing the threshold for second staircases to 18m, following calls by the Riba and the Chartered Institute of Housing.
Hill said this uncertainty was contributing to Build to Rent investors being reluctant to commit to purchases on major high-rise schemes, given fears they could be left with assets that didn’t fit with the rules ultimately adopted. “At the moment it’s very hard to get firm offers from the Build-to-Rent guys, it’s really cooled,” he said.
Last month Clarion said it had put 15 schemes totalling 2,000 homes on hold due to the second staircase issue, while in March Peabody said it was sending up to 20 tower schemes back to the drawing board.
An analysis by LH and Connells last month found that up to 125,000 homes in the London planning pipeline were likely to be affected by the second staircase issue.
Andy Hill’s comments come after the group in April reported turnover of £716m for the 2022 calendar year, down 5% after it was affected by planning delays. The Essex-based business is planning to grow to £1.25bn turnover by 2025.