Building safety hold-ups blamed as new housing starts in London plunge to 16-year low

A new report has said that 23 of London’s 33 boroughs had zero new housing starts in the first quarter of this year.

Residential development consultant Molior said work on just 1,210 homes had begun in only 10 London boroughs.

The report said the figure was the lowest three month total since Q1 in 2009, when the country was in the grip of the financial crisis, and added that if continued meant the capital was on track to build just 5.5% of the government’s target of 88,000 new homes across London this year.

Molior’s report said a lack of off-plan investment buyers was partly to blame but it pinned the problems on the safety regulations that have been introduced since the Grenfell Tower fire in 2017 which killed 72 people.

Complaints from developers and builders about the hold-ups around the gateway 2 and gateway 3 regulations have increased in the past few months as the scale of the problem becomes clear.

The Building Safety Regulator’s (BSR) gateway 2 check must be passed before construction can start while the gateway 3 check has to be completed before occupiers can move in.

But developers having been waiting months to get approval at gateway 2, far longer than the promised 12 weeks.

Last week, the deputy boss of the BSR blamed a lack of industry design expertise for contributing to gateway 2 delays, admitting he had “underestimated” how hard the transition to the new regime would be for firms.

Tim Galloway said gateway 2 applicants “don’t quite as yet understand what is expected of them” despite several years of signalling by the Health and Safety Executive, which contains the regulator.

>> See also: What the delays at the Building Safety Regulator mean for high-rise development

But the construction director of London firm Olympian Homes told Building that companies were not being given enough help to adjust to the new rules. Richard Goodwin called the delays a “national scandal” and added: “It is all well and good the BSR keep blaming industry for these delays, but they have a clear policy not to engage, not to discuss, not to help any applicant prior to submission. Apparently this is because they don’t want to be seen to mark their own homework.

“When any new set of regulations is introduced that represents such a paradigm shift from previous ways of procuring development projects and that hitherto has also suffered from such poor and contradictory guidance, to assist industry to understand them exactly would surely be the least that could be expected given what is at stake for the country’s growth prospects. But no, not a bit of it. A silo mentality prevails.”

In February, McLaren chief executive Paul Heather said: “The impact of the approvals process for gateways 2 and 3 is delays of six to 12 months on new builds. These delays are creating significant cost impacts, causing investors to hold back finance and, in some cases, are making projects unviable.”

Home Builders Federation chief executive Neil Jefferson told Building earlier this month there was “no doubt that some applications are taking the best part of a year to process” and added: “[I] cannot overstate the problems that are being created by these delays.”

Several gateway 2 applicants have told Building that their applications are being turned down months after being validated by the BSR.

Galloway admitted the regulator is currently rejecting around 40% of gateway 2 applications because they fail to meet requirements and another 35% because they are missing key information, sometimes of a “basic” level.