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AJ exclusive: new data shows boom in architects' fees

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Architects are finally shaking off the effects of the recession, with fees leaping to their highest level since 2000

New research by industry expert The Fees Bureau shows average hourly rates increased by 7 per cent in the 12 months to July 2015.

Sole principals’ median hourly rates rose by 20 per cent to £90 an hour, causing the fees index to jump by 8 per cent and reach an all-time high.

The annual survey converts data that has been submitted by UK private architects into an inflation-adjusted index, using fee levels in 2000 (represented by 100) as its baseline.

This year the cross-sector index rose from 101 to 109, while the private housing index soared from 98 to 116.

A spokesman from The Fees Bureau said the sharp overall rise was largely driven by the private housing sector. He said: ‘We measure the index across new-build and refurbishment projects on traditional as well Design and Build contracts.

‘Although other sectors have performed well, private housing is the only sector that has seen rises across the board.’

Adrian Dobson, executive director of members at the RIBA, said: ‘During the last six months we have had a lot of practices saying that they are beginning to be able to negotiate better fee levels. This seems to be a supply-and-demand effect as the spare capacity in the profession decreases.’

Nick Willson, director of Nick Willson Architects, said the findings echoed his own experiences: ‘Our private one-off house work has increased and the fees are much higher.

‘We haven’t had to negotiate as much and can now provide a more extensive service as the fee reflects the time involved.’

The figures also showed a large increase in the bottom quartile of the average hourly rate for sole principals – up from £59 to £75 per hour, suggesting an end to the aggressive undercutting that was prevalent during the recession.

For more information visit www.feesbureau.co.uk

Hourly rates [2016] - data supplied by the fees bureau

Hourly rates [2016] - data supplied by the fees bureau

Comment

John McManus, BDP chief executive
At BDP, we never really discovered the rock bottom of the market because we refused to bid at certain levels and, as a result, it is difficult for us to know the full extent of the rise.

Nevertheless, there has been a definite shift into healthier fee ranges. Furthermore, we are not seeing some of the suicidal bids that were being made during the recession. 

More and more we are finding ourselves in the middle of the pack – where we like to be – on competitive fee bidding for architectural work.

However the report does seem to be heavily influenced by housing sector work and I would assume that in turn is heavily influenced by the London market, as we are not seeing that level of increase outside London.

Zoe Smith, director at ZCD Architects
The market is definitely more buoyant now. More projects are happening and people are spending money, although more cautiously. We also see this in the number of enquiries we are getting this year as opposed to last year.

It is more economical to stay and extend a house than to move

The rise in private housing work reflects the wider context of the housing market and house prices in London – more often than not, it is more economical to stay and extend a house than to move. Furthermore, as a practice we certainly now have a better understanding of the actual time involved in these projects which is labour intensive, and fees have to reflect this, even if it is not always easy to explain to a client.

Has there been a reduction in undercutting? I don’t know. But we certainly price projects based on the time we think they will take, which in turn is based on previous projects of a similar type. The office tries to stick to fairly rigorous time-keeping so we understand and can analyse what it costs to deliver a project.

Will Foster, director at Foster Lomas
I was recently bidding for a small housing scheme and the developer told me that a local architect would do it for virtually nothing. Because our general workload is now healthy, I felt confident to charge more, which reassured the client that we wanted to do a good job. That dynamic may have been different five years ago.

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Readers' comments (2)

  • Good news indeed - A few questions however - How does the data vary regionally please? Is this reflected nationwide as the same levels? Are the higher fees concentrated in the South East - or does the same level of increase index apply generally?

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  • According to data from only a few months ago - this seems a bit sudden:
    https://www.architectsjournal.co.uk/home/events/fee-levels-stagnate-despite-architects-optimism/8684221.article
    How long has this rise been evident? Can it be assumed it will persist, given the fact AJ reported RIBA accounts of relative fee stagnation only in June this year?
    Less than 4 months seems a little short to draw conclusions for headlines such as this?

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