An estimating expenditure tool which helps facility managers and surveyors find maintenance and operating costs.
There were few sectors that escaped unscathed in 2023, from the negative impact of high borrowing and low consumer demand. Housing was the most affected, as inflationary pressures and persistently high mortgage rates slowed down activity. However, Repair and Maintenance (R&M) was one sector that performed better than expected and drove growth – with an overall outturn growth of over 6% according to the latest BCIS Forecast.
Owing to the continued strain on household finances and constraints on public sector departmental spending, BCIS doesn’t expect the sector to grow at the same pace and estimates it will fall this year by -7% in 2024 before returning to growth by +1% in 2025.
However, as we head into election year it’s clear that there are vital issues across both the public and private realm that need addressing. From safeguarding vulnerable residents in social housing to ensuring our schools and hospitals are inhabitable, we explore the key areas that all the main parties need to be prioritising in their manifestos and allocating funding to.
The Building Safety Act that came into effect in 2022 will keep both residential and public R&M in business, as homebuilders continue to fix fire-safety defects on all buildings they’ve developed or refurbished in the last 30 years. In December 2023, the Fire Protection Association (FPA) reported that ‘3,824 residential buildings, 11 metres or over, have unsafe cladding and are in the process of being remediated’.
Campaign groups such as End our Cladding Scandal continue to place pressure on the government to act. Since 2019 it’s called for the government to release funding for remediation projects and has set a deadline for June 2024, for all buildings to have a remediation plan in place. Meanwhile, Newham Council has become the first council to prosecute the owner of a tower block and find them guilty of delays replacing Grenfell-style cladding. Pressure form campaign groups, combined with the potential of other landmark rulings, will no doubt keep fire safety in social housing at the top of the government’s agenda.
Furthermore, in early January of this year, housing secretary Michael Gove demonstrated that speeding up the resolution of health and safety issues – specifically concerns around black mould – is a top priority. His consultation proposes stricter time limits for social housing providers – these include investigating hazards within 14 days and making emergency repairs within 24 hours.
The proposals were introduced to bring Awaab’s Law into effect. This law was passed in the wake of the tragic death of two -year-old Awaab Ishak, who died from a respiratory condition caused by excessive damp and mould in the social housing property he lived in.
Schemes such as the Social Housing Decarbonisation Fund – launched in March 2023 – has also allocated £1.4 bn of funding to be rolled out until 2025 to local authorities and providers of social housing, to improve the energy efficiency of homes. The measures are to include loft insulation and new windows. As well as helping households that have an EPC rating of D or below, to save money, it could generate 20,000 jobs across the retrofit sector.
However, although there is an urgent need to address both energy efficiency and health and safety concerns, these competing demands could potentially constrict the proportion of funds that councils are able to allocate to day-to-day repair and maintenance.
It’s no longer mandatory for lettings to require a minimum Energy Performance Certificate (EPC) rating of C from this year. But the decarbonisation of the UK’s existing private housing stock will remain a top priority for homeowners and landlords, who are keen to raise the energy efficiency of the properties in their portfolio above the average E rating, to save on heating bills and improve their green credentials.
However, as households continue to feel the strain on their budgets, due to hefty energy bills and the increased cost of living, growth could be tempered. On the flip side, the current uncertain housing market – characterised by a fall in house prices and rising interest rates – means potential house movers may opt to stay put and improve their existing property.
In addition to this, the sector could be buoyed by the recent announcement that the government has granted £16 million, to fund energy saving measures and sustainability initiatives, under the Green Home Finance Accelerator programme. Among the 12 separate projects allocated funding for development are Sunsave’s Electric Roof Project and Perenna’s long-term, fixed rate ‘green mortgage’, which will incentivise customers to enhance their homes’ energy efficiency by offering a reduced mortgage rate.
The UK is cherished the world over for its historical, and often beautiful, buildings – from its Tudor timber framed buildings to elegant Georgian and Victorian terraces and 1930s houses. Almost 38% of homes in the UK were built prior to 1946 and as much as they’re often glorified for their beauty and elegance, they’re also notorious for being draughty and energy inefficient. Over 10% of these are listed buildings or in conservation areas. The practical challenges involved in retrofitting these properties are further exacerbated with complicated planning processes that have been criticised for hampering government efforts to achieve net zero targets.
At the start of this year, the government published proposals to address the cost and time taken to obtain permission. Among the proposed measures were increasing the use of local listed building consent orders and improving processes for owners to accessing information on how to upgrade properties, without damaging or compromising their unique features.
The recently revised National Planning Policy Framework (NPPF) has also outlined guidelines that aim to speed up the time in which planning applications are processed, as well as making the process more consistent.
However, the proposals also highlighted the dearth of skills across planning authorities in this specialist area that requires skills across heritage, sustainability and retrofit – just 16% of local authority staff feel ‘very confident’ about decisions on energy efficiency retrofit, according to a Historic England local authority staff survey. And while property developer Grosvenor has praised the consultation for potentially ‘generating £35bn of output a year and reducing carbon emissions for nearly a quarter of all UK homes, while protecting UK’s heritage’, it remains to be seen how this work could be delivered without an appropriately skilled and trained workforce.
Back in September of last year, the extent of the Reinforced Autoclaved Aerated Concrete crisis in the education sector was just beginning to unfold, when the Department for Education (DfE) advised the closure of 147 schools across the UK, due to the risk of crumbling concrete.
It wasn’t long before estate managers across the rest of the public sector were also assessing their building stock. By the end of October, the Department of Health and Social Care (DHSC) confirmed that 42 hospitals were affected. Subsequently, BCIS estimated the cost of the replacement of a school building roof at up to £1,150,000, while the estimated costs for replacing the roof of a four-storey hospital, including refurbishment of the rooms, were estimated at up to £2,000,000. In December 2023, the crisis was compounded by the news that the backlog maintenance figures for the NHS – as collated by The Estates Return Information Collection (ERIC) – had risen by 13.6% since 2021/22, to a new record high of £11.6 billion. If funding isn’t allocated to begin to address this backlog, the health and safety of staff and patients will continue to be seriously compromised.
While RAAC remediation work is likely to continue to drive growth in the non-residential R&M sector, the government has also announced it intends to set out plans and measures to decarbonise the UK’s entire education estate. This most recent move was instigated by the Environmental Audit Committee (EAC) of MPs who wrote to the DfE last year, urging the implementation of a retrofit programme – at an estimated cost of £2bn – after sector experts warned just ‘one-fifth of the UK’s school estate would likely be net-zero compliant by 2050, due to a lack of comprehensive planning.’ The EAC also urged the DfE ‘to set out plans for measuring, forecasting and mitigating risks including flooding, overheating and water scarcity.’
The DfE’s ever-growing to-do list coupled with the urgent need to address pressing remediation works highlight just how essential it is to allocate funds to non-residential and public R&M this year.
Although the commercial property market has been hard hit these past few years, due to increasingly hybrid working practices, there are signs it’s bouncing back. The JLL Central London Office Market Report for 3Q2023 reported that occupier take-up was 10% up on the previous quarter, at 2.2 million sq feet, although this was 19% lower than the long-term Q3 average of 2.8 million sq feet. Avison Young’s (AY) Big Nine report revealed a take up of 15% compared with Q2 in 3Q2023, while The Q3 London office Crane Survey suggested renewed optimism in developers.
The debate surrounding the pros and cons of office working, as well as the best way to increase productivity, continues to rumble on. But businesses that wish to attract more of their workforce back to the office will increasingly need to consider how they can improve the quality of their working environment to ensure it’s an appealing enough proposition for their employees. As minimum energy efficiency standards (MEES) regulations are tightened, pressure will also mount to improve the ratings of Energy Performance Certifications (EPC) given to buildings – a move that will meet both government requirements but also the expectations of customers and employees who increasingly place a high value on green credentials.
As with 2023, R&M looks set to outperform the other sectors this year. However, the economic backdrop remains uncertain and recent inflation has cut into existing maintenance budget in all sectors, particularly in the public sector. Therefore, our current forecast for R&M is for output at constant prices to fall 7% in 2024 before recovering in 2025 and beyond. We argue that this can’t be allowed to happen, as there are many urgent issues that need addressing. R&M is integral to improving the quality of our buildings and creating environments that people can live, work and flourish in.
Therefore, in this election year, we want to see all the main parties prioritise R&M. We urge the current government to fulfill its promises on the areas where they’ve allocated funding, as well as invest more into green collar skills to ensure we’ve an adequately skilled workforce to achieve these aims. We also ask any subsequent government, to follow through on the government’s commitments.
An estimating expenditure tool which helps facility managers and surveyors find maintenance and operating costs.