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Developers are cashing in while architects undercut each other

Christine Murray
  • 3 Comments

It is not only architects who are getting a bad deal in the housing sector, says Christine Murray

I’ve heard more than one property developer poke fun at the low level of architectural fees, a pittance in the overall cost of a project. One quipped: ‘It’s nothing compared to what I pay my lawyers.’

A reputable client may appreciate the value brought by good design but, with the number of hungry firms willing to undertake loss-leading work, they have the pick of the best. The undercutting and improper resourcing that hurt the profession so badly during the recession has continued unabated even as workloads pick up, enabling developers to fleece talent. The few practices that operate unprofessionally must be stopped – and the RIBA must engage on this issue.

This damaging state of play is most critical to address in the housing sector, where it is not only architects that are getting a bad deal. With David Cameron’s announcement of the 100 estates regeneration programme to be undertaken via loans to developers, we must be reminded that council housing is a public asset. The sell-off and redevelopment of housing estates is effectively its privatisation. Yet councils have been known to give estates away for next to nothing as sweeteners – even though private developers are ‘regenerating’ with a built-in 25 per cent profit margin. At Elephant & Castle, Southwark was paid just £50 million for the Heygate Estate land (estimated to have a value of £300 million), and spent an additional £65 million on prep work, while Lend Lease’s estimated minimum profit is £194 million of the £990 million gross development value.

In the first in a series of in-depth features on housing, we look at the lessons we can learn from neighbouring borough Lambeth’s estate renewal programme. Architects are essential to estate renewal – not least in their pivotal role in community consultation and planning. They seem to give their work away for very little, despite the fact that they are often on the receiving end of bad press and protests when things go wrong. All private developers are profit-driven and councils such as Southwark have been naïve in relinquishing control. If the councils ltook the lead on estate regeneration under more robust agreements with private developers, we could see fewer ‘poor doors’ and a greater proportion of social-rent homes.

In the new-look, fortnightly AJ, our ambition is to use print for what it does best – telling complex stories with an emphasis on drawings and pictures. The purpose of the AJ is to provide creative intelligence to support architects in their continuing professional development on every platform, to help them stay competitive and win work. In this edition you’ll find our tips on how to get the most out of MIPIM, more competitions listings and client interviews. Then, we offer a close look at four projects completed at colleges – a significant pipeline of work for architects since tuition fees were introduced and subsequently hiked, leading to a £1.8 billion surplus at English universities.

  • 3 Comments

Readers' comments (3)

  • I wonder if, in addition to some London councils and David Cameron, the London mayor - as boss of Transport for London - is also getting a bad deal in the form of the framework contracts to develop spare TfL land? Mr Johnson's apparent sympathy for the interests of developers in contentious planning decisions doesn't bode well for the poor and the young in London.

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  • Thanks for writing this article. Wish the RIBA would bring back recommended fee scales so that we compete predominantly on quality and approach...

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  • Chris Roche

    Almost every client introduced by RIBA Client Services comes with the expectation Architects will carry out initial site visits and preliminary work at no cost. The problem is then exacerbated by desperate architects offering fee rates below those required to carry out the project effectively. This is in breach of RIBA Codes and ARB regulations which requires projects to be adequately resourced. Junior Doctors are standing firm in the face of government threats to their pay and conditions, and Architects need to take action individually, and collectively to ensure the profession is able to deliver professional services at sustainable fee rates. RIBA needs to take a lead and urgently.

    Chris Roche / Founder 11.04

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