The Week That Was - 8 March 2024
Welcome to the week that was, a round-up of key events in the construction sector over the last seven days.
New reinsurance scheme to cut premiums for leaseholders, according to FCA
The Financial Conduct Authority (FCA) has said that a new reinsurance scheme will be introduced to reduce the cost of insurance premiums for residential leaseholders. The Fire Safety Reinsurance Facility (FSRF), which is being developed by the Association of British Insurers, aims to bring down premiums that have sharply increased since the Grenfell Tower fire. Currently insurers do not cover the entirety of such buildings, but, under the FSRF, one insurer would be able to offer cover for a whole building with a significant amount of risk being passed to reinsurers. A spokesperson for the FCA said: "… the launch of this scheme will improve the position and reduce insurance costs for many of the buildings and leaseholders most affected by fire safety issues".
You can find out more here.
RIBA reports that 41% of UK architects are already using AI
A recent report by the Royal Institute of British Architects (RIBA) revealed that 41% of UK architects surveyed are using artificial intelligence (AI) in their work. The survey indicates that 43% of those using AI found that it enhanced the efficiency of the design process. Despite 54% of UK architects foreseeing AI integration in their practice within two years, 69% have not invested in AI research and only 41% plan to invest. 58% believe AI increases the risk of work imitation, with opinions divided on its impact, as 36% perceive it as a threat to the profession.
RIBA president Muyiwa Oki has said: “… our findings show architects are curious and open-minded about AI, and some of us are true pioneers. By fostering interdisciplinary collaboration and a culture of responsible innovation, we can harness the power of AI to create a more inclusive, resilient and sustainable built environment. There’s no turning back".
You can find out more here.
High Court overrules Gove’s rejection of M&S Oxford Street scheme
The High Court has overturned housing secretary Michael Gove’s rejection of Marks & Spencer's plan to redevelop its Oxford Street flagship store. The scheme was rejected by Gove last year on the grounds of its heritage harm on nearby buildings and the carbon footprint of demolition and rebuilding.
Justice Lieven upheld M&S’s appeal on 1 March. Justice Lieven accepted M&S’s claims that Gove had wrongly assessed: the presumption in favour of reusing buildings in the National Planning Policy Framework; the consideration of other options; the balance of public benefits against heritage impacts; harm to the vitality and viability of Oxford Street; as well as embodied carbon policy. However, she did not accept M&S's claim that Gove had erred in his analysis of the scheme's analysis on the nearby Selfridges and Stratford Place buildings.
A spokesperson for the Department for Levelling Up, Housing and Communities acknowledges the judgment and noted they are considering next steps.
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New building schemes will fail to meet incoming safety standards
Construction News reports that the Industry Safety Steering Group (ISSG), chaired by Dame Judith Hackitt, has seen “hard evidence” that some developers are not paying enough attention to new building-safety requirements in the design stage.
The ISSG criticised the industry as a whole for its lack of leadership on building safety, adding that it had worked with organisations that considered the issue “peripheral”. “We still observe a widespread culture of reliance, expecting to be told step-by-step by Government and the regulator how to keep buildings safe,” the report said.
Whilst the report is directed to the actions of developers, the criticism of the attention being paid at the design stage will be of note to insurers of all designers.
The full article can be found here.
Unite makes provision for remediation of student accommodation
Student developer Unite Students' 2023 has said it expects to recoup up to three quarters of the money it will spend remediating dangerous cladding through claims from contractors, it said in its 2023 financial results announcement. Under the Building Safety Act, developers need to put aside funding to deal with cladding on all residential buildings over 11 metres high. At the end of 2022, the student developer had outstanding provisions of £113.3m. The company has now revealed it made additional provisions of £86.2m during 2023 for work on 10 projects, with the outstanding provision at year-end amounting to £42.3m.
Read the full article from Construction News here.
Authors for this week's edition: Cecilia Everett, Mandice Man Man Li, James McKay
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