Looking Ahead 2022: Challenges and Opportunities

With 2022 now in full swing, we speak to Director, David Banister, about what’s coming up for ArchiPhonic and the challenges and opportunities the sector will face over the next 12 months.

The last 12 months have been particularly turbulent for the property and construction sector and as an architectural design practice supporting clients and developers working on commercial residential projects, we’ve been at the front line of this.

Planning delays, legislation changes and the rising cost of materials have all had a huge impact, delaying developments and putting financial pressure on contractors. The rising cost of materials is a significant issue that’s unlikely to abate in the near future. 

 

Increased Material Costs

Data from BCIS published in late 2021 highlighted that the cost of construction materials had reached a 40-year high, with materials such as timber and steel increasing in cost by around 80% since January 2021. This will continue to be a huge challenge for the sector as it will affect cautious new developers and increase the risk to lenders, potentially reducing sources of funding.

However, house prices are still increasing. Although a more stressful and lengthy process, many developers are managing to recuperate increased material costs as sale prices are higher than their original valuations. In November Halifax reported an annual house price growth of 8.2%, with the average UK house price hitting £272,992 in November, compared to £252,235 a year ago, a rise of £20,757. While this growth is expected to slow – Halifax predicts growth of about 1% – the residential sector is still likely to stay strong and encourage more development. 

 

Legislation Changes

Changes in legislation that happened in 2021 will also impact ArchiPhonic and other practices. These include the extension of ‘permission in principle’ legislation to include major developments, not just small sites. A plan to support small and medium size builders has also been established, by temporarily lifting the small site threshold below which developers do not need to contribute to affordable housing. 

 

Planning Delays

Planning delays and reduced communication with case managers, an issue that has been enormously exacerbated over the past two years due to the pandemic, is still a daily challenge that our team faces and one that we’re keen to work with planning departments to help resolve and help clear the backlog. One of the key problems for planning departments during this period has been resource, so we welcome this month’s news that the Department for Levelling Up, Housing and Communities (DLUHC) will provide English Councils with a share of £53.9 billion in funding for the 2022/23 financial year, some of which we are hopeful will be used to address resource issues and clear the logjam of planning applications.

 

ArchiPhonic Projects

Sector issues and challenges aside, it’s already gearing up to be a busy year for ArchiPhonic. We have a new build passive house project set to go on site this month, we expect our new build apartment block scheme on Smithdown Road to be completed early this year and our Chicago Buildings project is also due to move into fit-out stage in coming months, which the whole team is extremely excited about. We are also waiting on pre-application responses to a number of diverse projects, including a barn conversion project and the conversion of an agricultural building into a bespoke dwelling.

While we know it’s unlikely to be plain sailing, we’re approaching 2022 with positivity and cautious optimism. By drawing on how we’ve had to adapt and respond during the last two years and ensuring collaboration and communication with our sector peers, we’re looking forward to growing our own business and supporting the recovery of our sector, locally and nationally.

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