DM Hall

Q&A with Carla Walker, associate building surveyor at DM Hall

Carla Walker

Associate building surveyor at DM Hall, Carla Walker, takes pleasure from surprising those who still think surveying is a ‘man’s job’.

After leaving school I studied Bioscience at The Robert Gordon University. It wasn’t for me. However, after buying my first flat I became interested in property, and as a result, a degree in building surveying followed. Since then I have never looked back.

I have worked for FG Burnett, Shepherd, and Aberdeenshire Council before joining DM Hall. Through my experience I have built up a good understanding of the commercial property market in the North East. 90% of our work is commercial, but we still carry out the occasional residential building survey to report on defects, for example. My geographical area covers Aberdeenshire, Moray, Inverness shire and the Western Isles – so an enormous area.

Highlight the biggest projects you have been involved in

The interesting aspect of building surveying is that there are so many areas in which one can specialise. Working in both the private and public sectors I have gained a wide experience of the different roles a building surveyor can undertake. From being involved in the refurbishment of a Grade a Listed building at Aden Country Park, in Aberdeenshire to demolition works. I have also been involved in the specification and building of tennis court and MUGA facilities and also creating disabled changing facilities in schools. So there are so many avenues building surveying covers out with the day to day roles involving dilapidations, condition surveys and insurance work.

Where would you like to be in future?

I want to work my way up to partner level and to help build DM Hall’s presence in the north east as best I can. I’m based in Aberdeen, and I’m looking to stay here for the foreseeable future.

The firm has no formal quotas or policies on advancement for women, but I’ve seen no glass ceiling while I’ve been here. I think that if I get my head down and work hard I have the same chance as everyone else.

What are your thoughts on your sector in terms of the number of females working in general and in higher positions?

There are not many women in the surveying profession. My firm has only two women in senior positions, and I think that is reflective, or maybe a little better, than the industry as a whole. Our professional body, the Royal Institution of Chartered Surveyors (RICS) is a good example of the disparity, with currently 13% of its membership being women.

RICS elected its first female president in 2014. The second was elected in 2016, which is a step in the right direction. There are more women than ever applying for jobs in surveying, or studying surveying at university, and the RICS is actively promoting surveying as a profession in schools and through social media to influence career choices.

Attitudes are definitely changing, though. At a recent surveying job at a church, I was met by one of the lady church elders, who had been expecting a male surveyor, because she had assumed it was a “man’s job”. I think I gave her a pleasant surprise.

Could more be done to encourage women into construction?

In my office in Aberdeen, I think the ratio of women to men is around fifty/fifty, at least in the commercial department. I think, at least on the employer side, enough is being done. DM Hall is very flexible, when it comes to working around childcare and making it easy for women to balance careers and children. I’m hesitant about the idea of quotas and I think more can be done to get young women into universities and onto courses like Building Surveying, into offices as professional trainees and through onto the Assessment of Professional Competence (APC).

What is the situation at DM Hall as a whole?

Our most recent intake of professional trainees had five women out of 15 trainees, so 1/3 female/ male ratio which is better than previously, but still a way away from parity. DM Hall has no set quotas and the same interview process, regardless of gender. We hire the best fit for the job.

We need more women to populate the pool of potential candidates. They are good enough not just to succeed, but to excel. For instance, 2016’s RICS Young Building Surveyor of the Year was a woman.  I’d advise any young woman looking at her university options to take a look at surveying. It’s a brilliant career.

Catch up with the rest of Scottish Construction Now’s International Women’s Day feature here.

Blog: Dilapidations – a question of timing

Kenny McDonald

Chartered surveyor Kenny McDonald outlines the best time for landlords and tenants to get advice on dilapidations claims.

Seeking the right advice at the right time can reap rewards for both landlords and tenants and maximise the ability of the parties involved to seek or defend against damages for alleged breaches.

A lease is used in most instances to formalise the agreement between landlord and tenant, the content of which will have implications for both parties throughout the term of the lease and at lease end. It is therefore of critical importance that the context of the lease is clear and concise and represents the requirements of the parties.

A prospective tenant should therefore seek advice from an experienced building surveyor to assess condition prior to entering into any lease agreement to minimise risk and avert potential claims. This is particularly relevant in the current commercial climate, where the majority of leases are for shorter terms.

The condition of the premises at commencement of the lease can have significant bearing on dilapidations claims. It is a common misconception among tenants that they are not obliged to repair, maintain or replace building components or landlord’s fixtures that were in poor condition at the outset of their tenancy.

Equally, the context of a Full Repair and Insuring lease does not imply a new for old policy and a tenant is not obliged to go beyond the standard of repair identified in the lease.

The wording of lease clauses and their inherent meaning can be complex. An experienced surveyor will be able recognise the merits and deficiencies of a lease and put this in context for their respective clients.

Most commercial leases will prescriptively identify the standard of repair within the repairing covenant of the lease. In most instances, this will place a burden on the tenant to “put the premises into repair or keep in repair”.

Broadly speaking, even if the demised premises are in poor repair at commencement this is not the standard to be maintained. Rather, the tenant is further obliged to maintain to a prescribed standard – often “good and substantial or good and tenantable condition, irrespective of the cause of damage”. The latter removes the landlord’s obligations to repair.

The standard of repair can be varied within the lease by a Schedule of Condition, most often in favour of the tenant, often requiring the tenant to return the premises in “no better or no worse condition” than evidenced in the schedule of condition.

It is therefore equally important where a schedule of condition is annexed that it is accurately reflective of the condition on the date of the inspection and identifies the whole of the demised premises.

Tenants should be aware that where alterations or additions are made to the demised premises these will be subject to the same repairing obligations as that of the existing premises. Alterations are subject in most instances to specific direction at the end of the term to either retain or remove.  Tenant fixtures and landlord fixtures are, in most cases, treated differently at the end of a lease and can have a bearing on the claim.

The expertise of a chartered building surveyor can be invaluable to both landlords and tenants where claims arise, particularly at the end of the lease term.

A landlord’s surveyor should endeavour to identify breaches and take cognisance of alterations to the property and prescribe the remedy required to resolve each breach. An estimate of cost should also be provided in order to establish the value of the claim.

An experienced building surveyor will have the ability to strategically assess the most viable options for the landlord to minimise future risk once the premises reverts, while ensuring the landlord receives “best value” from the outgoing tenant.

By equal measure, a tenant-appointed surveyor will be able to consider the merits of the landlord’s claim and minimise exposure for the client. In some instances, this may go beyond simply negotiating the claim line by line and an element of commercial awareness can go a long way to reaching a favourable settlement.

The best time to appoint a building surveyor? As soon as possible. Once appointed the surveyor will be able to make an assessment of the type of service required and provide strategic advice to the client.

This advice can be invaluable in minimising risk prior to the commencement of a lease for landlord and tenant alike. At lease end, the appointment of a chartered building surveyor can be the difference between a good and bad outcome for the client.

  • Kenny McDonald is an associate in Building Surveying Consultancy in the Glasgow North office of DM Hall Chartered Surveyors.

Blog: Retrospective applications: it simply doesn’t pay any more not to abide by the rules

Alan Jeffrey

Alan Jeffrey outlines the ways in which the Scottish Government is cracking down on retrospective building alteration applications.

Financial incentive is one of the most powerful drivers of change in human activity and the Scottish Government is employing this mechanism quite ruthlessly to bring the use of its building control system into line.

Just last year, it doubled and trebled the fees for dealing with unauthorised alterations to buildings, mostly domestic residences. But that is just part of a cautionary tale about which professionals and the public alike should be aware.

As well as the dramatic hike in fees, people who have not complied with the regulations in force will face substantial costs for professional advice, new drawings, inspections and almost inevitable remedial works.

The costs of not applying for a building warrant up front or obtaining a completion certificate at the right time are now verging on the prohibitive. Non-compliance, not to put too fine a point on it, is a mug’s game.

To be fair, it is understandable why the Scottish Government wants to impose uniformity on a system which currently is undertaken by 32 local authorities in their role as Verifiers, with each authority responsible for verification in its own geographical area.

Prior to May 2005, each authority treated retrospective applications differently, with most demanding plans showing the alterations then issuing letters of comfort or letters with of qualifications.

And there is no doubt that there was a problem to be addressed. When I left Building Control in 1990 to embark on a career in surveying, there were as many people applying for retrospective permissions as there were applying for Building Warrants.

Further, the long-term objective of the government has always been that the fees charged to users of the building standards system should cover the cost to public funds of providing those services. Ideally, the system should be wholly self-funded.

There has been no increase in fees since 2005 and, while the system has washed its face in good times, sharp drops in income caused by external events such as the 2008 recession has resulted in substantial deficits.

The consequences of becoming involved in applying for a Late Building Warrant, where work has been started but not completed, or a Completion Certificate, where the work has been completed but no Warrant has been obtained, can be far-reaching.

Such omissions ping up sharply on the risk radar of lenders and can have major implications for mortgage approval, potentially affecting transactions of several properties involved in a chain.

Home Reports, carried out by qualified professionals, have had the effect of uncovering a greater proportion of uncertificated works and solicitors are seeking more detailed professional advice on whether past alterations have the appropriate warrants.

Surveyors may have to call in expert advice on contentious issues, once again adding to the costs of historic non-compliance.

Each band of submission fees has been increased, with the minimum, for works costing up to £5000, increasing from £100 to £150. The fee for a Late Building Warrant is up to 200% of what appears in the fee scale and a Completion Certificate is up by 300%.

Obtaining permission retrospectively for the most simple warrant applicable alteration will incur a minimum submission fee of £450.

There are exemptions, of course, but the work involved in such exemptions must still comply with the Technical Standards.

In some cases, omitting to apply for the relevant permissions arises from genuine mistakes or misapprehensions about the nature, range and scope of the regulations. But this only illustrates the importance of seeking early, impartial, qualified advice before embarking on projects, however small.

Our Property Services Department provide a full architectural service.

We can help with retrospective permissions and drawings, land registration issues, boundary disputes, Energy Performance Certificates and a range of matters up to and including full SAP Calculations for new build houses.

The rules have changed. It simply doesn’t pay not to abide by them.

  • Alan Jeffrey is an associate in the Property Services department of the Dunfermline office of DM Hall Chartered Surveyors. He is an accredited RICS Mediator and is on the Scottish RICS Panel of Mediators.

Blog: Scotland’s churches are part of our national treasure, but valuation presents a professional challenge

Adam Jennings

Chartered surveyor Adam Jennings on the intricacies of valuing churches.

Scotland’s churches are part of a long and proud heritage. They stand tall at the heart of every community, crafted from native stone and embellished with often stunningly beautiful architectural complexity.

However, times change, and buildings which were designed to accommodate congregations of hundreds, or even thousands, now struggle to attract and retain dwindling bands of regular worshippers.

This poses a dilemma for church authorities which, increasingly over recent years, have been forced into disposal programmes to rationalise the estate and to raise funding to maintain and restore remaining church buildings.

It also creates a serious challenge for surveyors who are tasked with valuation of buildings with a vast range of differing characteristics, often in the absence of discernible trends or comparable sales evidence.

The sale of church buildings is not new. Declining attendance has been at the heart of ecclesiastical concerns for many decades, but there is little doubt that the pace of disposals is accelerating.

But disposal has to be seen in the context of the historic scale of the church estate in Scotland, which runs into thousands of buildings.

New church provision ran at a frantic pace through the 17th, 18th and 19th centuries. After the Great Disruption of 1843, the Free Church of Scotland alone built more than 700 new places of worship by 1847. The established church added more than 500 parishes between 1843 and 1909. Competition, naturally, led to oversupply.

That is the legacy now being dealt with. As attendances diminish, congregations in close proximity to each other may decide to amalgamate and sell off one of their churches to raise capital for the maintenance and repair of the remaining one.

Though our commercial department has compiled its own substantial body of evidence in this specialised arena, the remarkable range of buildings, disparity of styles and vagaries of location make like-for-like comparison uniquely difficult.

But while church buildings have their own issues – traditionally built from sandstone, pitched slate roofs, often listed – there are buyers out there. There is a growing trend of purchase by other faith groups who may see the option of an existing church as a cheaper alternative than building their own place of worship from scratch.

And many churches fall into the Class 10 category in the Town and Country Planning (Use Classes) (Scotland) Order 1997, meaning that they are in the same use category as children’s nurseries, créches, libraries, meeting halls, exhibition halls and some education facilities.

Some obsolete churches have also been acquired by community groups which have secured funding and are attracted by good sized floorplates together with a suitable range of support accommodation.

In general terms, the more marketable church buildings tend to be located in urban areas, often benefitting from adequate parking provision and distinctive architectural features.  Should the above criteria be met in affluent areas, developers can justify the cost of conversion to, for instance, flatted dwellings, subject to planning.

One such example would be the recent disposal of former traditional, Grade ‘B’ listed church premises on Great George Street in Glasgow’s West End, with DM Hall acting on behalf of London and Scottish Investments.

Interest levels were considerable, resulting in a closing date for offers.  The successful buyer is presently creating 21 flatted dwellings within the original church building, with a further three new build units to be constructed on site.

The economics of conversion, however, may not add up in lower value areas – even if the church was similar – because the end values on completion would be significantly less attractive.

Church buildings occupying rural locations, with a lack of services, those surrounded by graveyard grounds or in a state of disrepair are often subjected to protracted marketing campaigns.  Indeed, in a number of circumstances, some such properties are ultimately disposed of via the auction route.

So, while the number of properties coming to market is only likely to increase, it will become no easier to paint a picture of the market in general and surveyors will essentially have to continue to provide a bespoke valuation process in this specialised area.

  • Adam Jennings is a surveyor in the Glasgow North office of DM Hall Chartered Surveyors.

Blog: Gentle undulations, rather than peaks and troughs. Just the property market we’d wish for

Eric Curran

Eric Curran talks about how the Scottish property market is shaping up in 2018.

As we look back over the residential property market in Scotland in 2017, it is encouraging to note that the optimism expressed at this time last year has, by and large, been justified.

Lack of supply, with the exception of Aberdeen, has once again been the principal, indeed overriding, theme and the same market distortion looks set to dominate as we enter the first few weeks of 2018.

Aberdeen, of course, is a market unto itself, as London is in England. If there was one disappointment in the Granite City in the past year, it must be its huge missed opportunity to realign itself away from its dependence on oil and invite other industries to the dynamic north.

No doubt Aberdonians will argue that that is exactly what they have been trying to do but the local economy is still far too heavily dependent on what happens in the grey waters of the North Sea.

Aberdeen aside, the market in Scotland has performed admirably, with acceptable, sustained growth over the longer term and an absence of disruptive peaks and troughs – exactly the conditions property professionals fondly wished for in the bleak years of the recession.

As last year, so in 2018 there have to be concerns about the new build sector, which is growing fat on a diet of government incentives which it receives to the exclusion of all other property types.

It is legitimate to ask if Help to Buy schemes simply push up prices across the board while funnelling funds into one, effectively subsidised, sector. If the aim is to help first time buyers, why is that help confined to 5% to 10% of the market?

Another trend which bears scrutiny is the rising appetite for the private rented sector (PRS), which is now offering serious competition to more traditional social housing models. Cui bono is a reasonable response.

There is no doubt that some PRS schemes on the drawing boards are of high quality and aimed at sustainable community building. But do such schemes simply lock Generation Rent – those unfortunate 20- to 34-year-olds – out of home ownership for even longer?

The Scottish Government has to be given credit for trying to do something different to address the housing shortage, such as providing incentives and rental guarantees for Build-to-Rent projects.

But the best laid plans gang aft agley, as with the Land and Buildings Transaction Tax. Its zero rate on homes under £145,000 was intended to encourage lower earners into the market, but is has been seized on by investors who are delighted to construct portfolios with no transaction implications.

So, there have been artificial effects on the market and these are likely to continue, but there has been a reasonable level of performance and we have continued to see modest price increases.

The Brexit factor is waning. This is not because the consequent uncertainty has diminished. It is simply that people become used to anything and there is a palpable wish simply to get on with our lives while the geopolitical battles rage on in the distance.

Rather than hanging on for a suitable property to buy before selling, some individuals are biting the bullet, selling advantageously and renting while they wait for something else to come along. Whether this is a profitable strategy can only depend on individual circumstances.

Brexit fluctuations will continue in 2018, but the uncertainty of a second Scottish referendum is largely now old news and there is a sense that, despite the continuing clamour in Holyrood, it is extremely unlikely to happen in the foreseeable future.

Perversely, just as the market is stabilising in the way most property professionals have wanted, risk is being reintroduced by, of all people, the lenders.

In their continued drive for economies and speed, they are actively developing automated valuation models designed to create valuations using mathematical modelling combined with a database.

These calculations will be based on specific points in time and analysis of comparable values. But, in taking out the human element, they are also removing professional eyes on the property, opinion based on experience and deliberation and analysis.

This is a short-sighted strategy which has the potential to seriously disrupt the integrity of valuation and possibly even create another lending bubble – which could burst again at any time.

Does anyone seriously think that is a good idea?

  • Eric Curran is managing partner of DM Hall Chartered Surveyors, based in the firm’s Glasgow North office

Blog: It’s time for a grown-up conversation about how to help solve Scotland’s housing crisis

Andrew McFarlane

Andrew McFarlane

Andrew McFarlane discusses the issue of the housing crisis in Scotland and outlines what action has to be taken to rectify the problem.

Housing has risen up the political agenda once again and, as happens with most politically sensitive subjects, the debate about it has immediately become rancorous and ultimately unproductive.

The irony is that there is a general, across-the board-agreement that, faced with a rapidly rising population, Scotland needs to do something about the chronic lack of decent and affordable housing stock.

Nicola Barclay, the chief executive of Homes for Scotland – widely seen as a builders’ and developers’ lobby group – put the cat among the pigeons recently when she said that Holyrood government’s target of 50,000 new affordable homes is damaging private sector growth.

She said that her organisation’s view was that a focus on affordable and social housing is exacerbating Scotland’s housing shortages, ignoring commercial realities and was not the only recipe for solving the looming housing crisis.

Immediately, she was condemned for being anti-social – that is, against the concept of social housing per se. She was accused of lobbying for the property developer model which is stigmatised as having fuelled the housing crisis in the first place.

Ben Wray, head of policy at Common Weal, claimed that Ms Barclay’s view on social housing was “aggressive lobbying” to extract more subsidies for private developers on top of the new subsidy for private sector build-to-rent.

In terms of a spat, it was all fairly predictable and ran along the lines we have come to expect when political considerations begin to intrude on what should be straightforward commercial transactions.

Ms Barclay was subsequently at pains to point out that focusing on one element of the market to the exclusion of others will not, of itself, solve the problem. The 50,000 target, she insisted, can only be met with the help of a healthy and profitable private sector.

Speaking from my long experience with DM Hall, my role as chair of the Judging Panel for the Herald Property Awards for Scotland and a non-executive director for a registered social landlord, I am convinced of one thing: the issue will not be resolved by fighting over it.

We can all agree on the root of the problem: Scotland needs more housing. The number of properties started in Scotland was down again on the previous year and completions were 36% down on 2007 and below 2010.

First-time buyers need an average deposit of more than £21,000 to get on the first rung of the Scottish housing ladder, typically around 16% of the purchase price. It is little wonder they are called Generation Rent.

But Ms Barclay is right in one major aspect – no one part of the house building sector can provide for all the different requirements demanded by an increasingly diverse and financially disparate society.

Collaboration is greatly to be desired among interested parties. We should not lose sight of the fact that there is considerable cross-sector work going on at the moment, but there is little doubt that there could be more of it, and better.

Another thing we should all be able to agree on is that there is more to be gained by collaboration than by conflict. We have to step back from knee-jerk reactions and try to see the points of view of other participants in the debate for what they are.

There is a generation of young people coming through at the moment who are sceptical about the possibility of ever being able to afford their own homes.

An open and mature debate is required from people with the relevant experience and expertise in the field to find solutions which will satisfy everyone.

Trading insults is not going to help.

  • Andrew McFarlane is a consultant in the Glasgow North office of DM Hall Chartered Surveyors and a Fellow of the Chartered Institute of Arbitrators.

Student accommodation plan for former Glasgow print plant

Graeme Todd of DM Hall

Graeme Todd of DM Hall

The former John Watson & Company print works in Glasgow is to be redeveloped as student accommodation and office space following its sale to developers Watkin Jones.

The planned development at Kyle, Calgary and Stafford Streets, will comprise student accommodation of around 300 bedrooms, ancillary accommodation, amenity space and parking.

The 0.85-acre site became available as a result of the sale of John Watson & Company to Multi-Colour Corporation, which is head quartered in Ohio, USA, and its subsequent move to a new build Centre of Excellence in Clydebank.

John Watson OBE, former owner of the business, said: “We operated very successfully from Kyle Street since the early 1970s, so its sale represents the end of an era. On the other hand, it please me greatly that the site will be re-born as student accommodation serving what will be the next generation of educated business people in Glasgow and the rest of the country.”

Graeme Todd of DM Hall, who oversaw the sale, said: “The property was sold at a closing date with several offers generated by a marketing campaign which had the benefit of an existing planning consent for a student accommodation development.

“Whilst there is much talk and debate about continuing demand for student accommodation development, our marketing of Kyle Street generated considerable interest, particularly as the site had so much to commend it, being close to the city centre, the motorway and a short walking distance from major bus and rail links.

“Demolition of the old printing works is imminent and the development should be projected for completion in August 2019.”

Blog: Time for a fresh look at the case for compulsory installation of residential sprinklers?

Andrew McFarlane

Andrew McFarlane

Andrew McFarlane makes the case for UK-wide regulation to make sprinklers mandatory in all new build houses.

The enquiry into the Grenfell Tower tragedy is well under way. And although it is sometimes considered trite to say so, lessons will be learned.

One of those will almost certainly concern the much-discussed issue of making mandatory the installation of sprinklers in residential accommodation. Current Scottish regulations require sprinklers in high rise residential buildings which are those over 18m in height, approximately 6 or 7 storeys.

In that context a further consultation on fire and building safety which will better protect all homes, new-build, privately or socially rented or owner occupied, has been launched this month by the Scottish Government.

Around three quarters of all fire-related deaths arise at home. The horrible incident in west London took place against a backdrop of a sharp increase in numbers of fire-related deaths – up 21 per cent between 2014 and 2015.

An ageing population and, some claim, the cuts that have been applied to local authorities’ budgets have played a part in the increased number of deaths. Certainly, evidence suggests that fire response times are getting longer, especially in the UK’s largest cities.

Social housing tenants are at greater risk from fire than other groups because of demographic factors including an ageing population, with the majority of deaths from fire occurring among those over the age of 65. This is because people in this age group find it harder to evacuate a building in time. The disabled are vulnerable for the same reason.

The issue of costs of installing sprinklers in new homes – around £2800 on average comparable to new heating system or rewiring – is at the crux of the issue. But how much value do we place on human lives?

A 2005 review by the UK Government’s Department for Communities and Local Government argued that research suggested that it would not be cost-effective to provide sprinklers in new homes, but that it would be reasonable to provide them in blocks of flats over 30 metres in height and in certain types of care homes.

This is likely to change as a result of the Grenfell Tower enquiry and, at a minimum, the height of buildings which require sprinklers could be reduced to the 18m level currently applying in Scotland. Some will argue that it should fall further to ensure that all three storey buildings have sprinkler systems fitted.

Regulation in Scotland to require sprinklers in care homes, hostels, hotels and other places of multiple occupancy in Scotland was tightened a few years ago, following the number of lives lost in the fire at the Rosepark nursing home in Uddingston, Lanarkshire. The same safety arguments that convinced politicians of the need for sprinklers in care homes apply equally to residential properties.

So is there a case for UK wide regulation to make sprinklers mandatory in all new build houses? I would say yes. Aside from Grenfell Tower, there is a steady, sorrowful stream of news stories each year about deaths at home as a result of fire and smoke inhalation.

Smoke alarms are already installed in new homes as standard though constant reminders, through newspaper and TV advertising, it seems, are necessary to have householders regularly check their batteries.

And whilst some homeowners are concerned about the possibility of their homes being flooded as a consequence of a faulty sprinkler system, the fact is that a properly installed and maintained system should represent only a very low risk of flooding. A soggy carpet is a small price to pay for saving a family’s lives.

Indeed, the statistics show that, in the incidence of fire, a sprinkler system will reduce the damage to a property by an average of 80% and in 95% of cases only one sprinkler is required to tackle a blaze.

Cost is the real issue though, since while the costs of installing sprinklers – of the order of £2,000 to £5,000 depending on size – or around 1% of the total build cost of a new home – this is a cost that, through lower insurance premiums, is capable of being recouped by the householder within four years. By way of comparison, a fire engine costs around £50,000 per year to run, while a full time fire crew costs around £770,000 per year outside London.

So, is this not a small price to pay for the many lives that can be saved as a direct result of installing sprinklers in homes? In Vancouver, Canada, sprinklers have been 100% effective in preventing fire deaths in new homes. They have been compulsory since 2011 in all new homes built in Wales.

The picture is made more complex, however, by the economics of the housebuilding sector. With recent significant rises in the costs of building materials and a skills shortage set to be exacerbated by Brexit, housebuilders are already wary about building houses where their margins are squeezed.

That there is a screaming need for more new houses is indisputable; equally, it is hard to argue that extra costs of installing sprinkler systems in all new houses increases builders’ costs.

Following its 2005 review a spokesman for the Department for Communities and Local Government said: “New regulation on housing needs to be balanced and proportionate.

“Making sprinklers compulsory in all new homes would add an estimated £2,000 to £3,000 to the regulatory cost of a new-build home, meaning fewer new homes, making home ownership less accessible especially for first-time buyers, and potentially pushing up rents in the private rented sector.”

And there you have it. Further investigation of the position in Wales and further drawing the attention of local and national governments to the issue can only be of value. Let’s hear what the Grenfell enquiry has to say.

  • Andrew McFarlane is a consultant to chartered surveyors DM Hall and a specialist in building surveying

Blog: Rising costs and skills shortages expected to weaken construction industry outlook

Andrew McFarlane

Andrew McFarlane

Increased building material prices and a shortage of labourers can flatten the Scottish Government’s laudable building ambitions, says Andrew McFarlane.

As the population of the UK inexorably increases, the most frequently employed stock response in political circles is to promise to build more houses. In Scotland alone, the Holyrood government has a target of 50,000 new affordable homes.

Vast sums of money have been allocated with a view to upping the building rate and encouraging councils, housing associations and construction companies to deliver new accommodations despite a challenging economic environment.

While such ambitions are laudable, there are many factors which can throw plans off target, and it is becoming clear that considerable increases in the price of building materials are heading up the worry list.

A newspaper investigation earlier in the year disclosed that some of the essential raw materials of the construction industry in the UK have been hit by price increases of up to 35%. Hikes of this magnitude can push the most meticulous margin planning into disarray.

The costs of some construction components, including plasterboard, chipboard and loft insulation, are rising at their fastest rate for 25 years.

The Construction Trade Survey from the Construction Products Association in Q4 last year showed that overall costs increased for 88% of civil engineering contractors, while 75% of main contractors also reported a rise in raw materials costs.

The main blame for these cost rises has been laid at the door of Brexit, with the subsequent decline in the value of sterling which is producing industry-wide inflation. Increased energy prices are also hitting manufacture of items such as bricks.

Nearly a quarter of building materials supplied in the UK are imported and a modicum of good news is that, in a typically proactive response, many trade suppliers are actively seeking to source alternatives to traditional markets.

But as well as cost issues, the construction sector is beset by an ongoing skills shortage affecting key on-site trades, with main contractors reporting at the beginning of the year that shortages of carpenters and plasterers were at their highest in nine years.

The Federation of Master Builders also warned of a shortage of labourers. Nearly one in eight comes from outside the UK and there is concern that many of these employees may decide to repatriate in the event of a hard Brexit.

As well as material costs, wage inflation is playing its part in the worries affecting construction. A survey by recruiter Hays showed that average salaries in construction and property rose by 2.8%, with building services achieving 3.5%.

Nearly two-thirds of building service employers said they had raised salaries over the course of 2016 and the same proportion expect to have to offer similar rises in 2017, with 16% anticipating that these increases will be in the order of 5% or more.

It is hardly surprising that the Office for National Statistics recorded a 1.2% decrease in construction output on May this year, both month on month and three month on three month. The most notable decline was in infrastructure, which fell 4%.

The construction industry is resilient. It has to be, considering the wide variety of external factors which can buffet it unexpectedly. But despite all its efforts, a weaker outlook for the rest of 2017 seems inevitable.

  • Andrew McFarlane is a consultant in the Glasgow North office of DM Hall Chartered Surveyors and a Fellow of Royal Institution of Chartered Surveyors

Blog: Energy efficiency: Holyrood unveils the big stick

Mark O’Neill

Mark O’Neill

By Mark O’Neill

Well, now we know. The Scottish Government has long indicated its desire to reduce the country’s CO2 emission through greater energy efficiency and has been assiduous in providing carrots. Are we are starting to see the stick?

One of the instruments in the drive to increase awareness and reduce unnecessary use of energy has been the Energy Performance Certificate (EPC). ECPs are now widely adopted and accepted in the commercial property sector.

But EPCs are just a measure. Other than the requirement imposed on vendors and landlords to prepare and provide EPCs, they have had no statutory teeth. There has been no element of compulsion on property owners to implement the recommendations contained within them.

From September 1st 2016, the Assessment of Energy Performance of Non-Domestic Buildings (Scotland) Regulations 2016 come into effect. These regulations follow-on from the Climate Change (Scotland) Act 2009 which contained provisions for ministers to bring forward regulations to compel landlords and proprietors to improve their properties.

It has to be said right away the new regulations, while adding to existing EPC regulations, are quite significantly limited in scope. They only apply to buildings, or separate units within them, with a floor area of more than 1000m2, which are being made available for sale or let.

To put this in perspective, the type of building likely to exceed 1000m2 is going to be the largest retail units, such as a High Street department stores, large industrial units, and warehousing and or commercial offices. Potentially, licensed and leisure properties such as hotels built over a number of floors might also be included, but to a lesser extent.

The other limiting factor is that the regulations apply only to buildings which do not comply with energy standards set out in Scottish Building Regulations from 2002 – so, modern property or property altered within the last 14 years may not be impacted.

This means only a small proportion of the current commercial stock – perhaps some 5% or so – will be affected. At the time of writing, there were something in the order of 500 – 600 properties of this size and over currently on the market for sale or let.

But this is a long game. There is provision for the policing of the implementation of the new regulations, backed up by fines, and I think we will almost certainly see a reduction in the size of buildings affected to 500mwithin four to five years – the blink of an eye in property terms.

And, while the initial numbers of landlords and property owners affected may initially be small, the ramifications for them could be costly.

Sellers will now have to have affected properties assessed for compliance to 2002 energy standards and where necessary have an Energy Action Plan prepared and act upon that plan. What is worthy of note is that the Action Plan attaches to the property in question rather than the person paying for it. There will be seven prescribed improvement measures which section 63 assessors can include, ranging from improving lighting to replacement of inefficient boilers.

There is another issue. With the action plan relating to the building, it could become a substantial liability for a seller, since the buyer will be obliged to do the necessary work. The implementation of the action plan may also fall at the door of tenants where their lease obligations require them to meet all statutory obligations relating to the property.

The changes will all cost money and they require to be implemented within three and a half years, so the clock is ticking as soon as the action plan is registered with the Scottish Government, via the EPC register. With the property requiring reassessment to ensure compliance has been met.

An action plan can be deferred, but an owner taking this course will have to exhibit a display energy certificate (DEC), a newcomer to energy assessment in Scotland, with actual energy usage being measured and monitored on an annual basis thereafter. Continual measurement and monitoring will come at a cost, so the price of deferral will quickly outweigh the expense of actually doing something to the building.

DECs could be seen by some as energy compliance avoidance, rather than evasion, but the reality is that recommended improvements have to be done at some time. It may turn out that the most useful purpose of DECs will be in allowing implementation over a longer period to accommodate financial constraints.

The jury is still out on whether this will make properties unsellable, as owners take the view that the game is not worth the candle and go down the road of demolition rather than improvement – a situation already being factored in as a consequence of the changes in empty property relief.

There is certainly the possibility that asking prices will fall, as energy efficiency deficiencies become viewed in the same light as dilapidations, though now with a new statutory requirement attached. Similarly, we might see Landlords passing the responsibility of implementing an Action Plan onto tenants, insisting that tenants comply with all lease obligations.

Commercial agents will have to become acutely aware of how this will impact on marketability and value. But of this there is no doubt: a new regime of compulsion is well under way.

  • Mark O’Neill is a commercial valuations specialist and a non-domestic energy assessor at DM Hall Chartered Surveyors.