On the Table: Refurbishment, Maintenance & Innovation

Our On the Table panel, from L to R:

• Chris Hall, chief executive, BRUFMA
• Bob Deane, managing director, Wetherby Building Systems
• Simone de Gale, chief executive, Simone de Gale Architects
• Darren Evans, managing director, Darren Evans Assessments

 

Q: What would you say are the main challenges/opportunities going forward for the refurbishment sector?
SDG The main opportunity going forward for the refurbishment sector is the recent change in permitted development rights. In 2013, the government introduced a three-year temporary right, allowing offices to be converted into a residential use without the requirement of planning permission. This will now become a permanent development right, and will increase the opportunity for residential construction projects considerably.

In addition, the right will be extended, so that not only can developers convert offices, they will also be able to be demolish offices in full, building new residential projects under the legislation. Implementation will be subject to prior approval with the local authority, and certain authorities will remain exempt from the rights, yet generally, the change will be a boost to the residential market, and is aimed to help meet government’s housing target of 200,000 additional households to be formed each year up to 2020.

BD The success of future refurbishment projects rests heavily on the introduction of new government backed energy efficiency schemes. Currently, our major challenge is to demonstrate to DECC that solid wall insulation (SWI) is a critical carbon reduction solution that has to be included in all future carbon reduction proposals. Restoring consumer confidence, following the failure of the Green Deal and ECO schemes, is also a significant hurdle to overcome. Homeowners, as well as contractors, installers and manufacturers, remain extremely sceptical over these government backed energy efficiency schemes and everyone involved will understandably have many reservations, if and when new initiatives are launched.

Maintaining a viable industry is also proving to be a major issue, with the National Insulation Association’s (NIA) latest report revealing around 2,000 jobs have been lost within the insulation industry alone, as a direct result of cuts to government home energy schemes.

However, there are some positives, as the Government cannot shy away from the fact that it is obligated to meet its carbon reduction targets by 2020. The seven million solid wall properties in the UK represent a significant opportunity for the refurbishment sector and installing SWI to these homes will be a major contributing factor to achieving these targets.

“There is a huge opportunity to reduce the carbon impact of our existing buildings, however there is no great incentive currently from government to work towards that goal” – Darren Evans, Darren Evans Assessments

CH In the UK we have a significant legacy of poorly insulated/inefficient buildings that governments of all persuasions have never really tackled. The opportunities are considerable however, in terms of carbon savings, monetary savings and improving the health of the buildings as well as that of the occupants.
The challenge is one of scale, efficiency, and for those ‘able to pay’, a lack of appreciation of refurbishment as a strategy to add value to a property. Unfortunately this means they lack motivation to invest. The Government’s focus on reducing energy costs via pressure on supply rather than demand measures leave us with a landscape of ‘cheap’ domestic energy and focus on alternative sources such as fracking which discourages investment in refurbishment. If it’s a choice of spending £10,000 on a new kitchen or £10,000 on external wall insulation, in the UK psyche, the kitchen wins out.

Those who are really interested in promoting energy efficiency refurbishment need to focus on the hidden benefits of such measures, such as increase in comfort and the health benefits that accrue from a warm, comfortable environment. The UK energy efficiency industry has relied on government subsidies for so long that it has forgotten how to sell itself.

DE There is a huge opportunity to reduce the carbon impact of our existing buildings, however there is no great incentive currently from government to work towards that goal at the moment. When you look at much of our existing stock from the 1940s to the 1980s it offers very little improvement on buildings of the 1800s. Man has landed on the moon since then, but very little changed in terms of energy efficiency.

There is the further challenge for those looking at making incentives for the private rented sector, in that it is not in the best commercial interests of private landlords to upgrade properties and they are simply waiting for the value of the land to increase.

Q: In your opinion, has growth in the refurb sector been handicapped by a lack of effective government policy? What recommendations would you make to the incumbent Government to improve things?

BD There is no doubt that the huge U-turn in the Government’s energy efficiency policy has resulted in the current hiatus in refurbishment projects. The deal that was struck with the utility companies in December 2013, which resulted in the subsequent cuts to ECO, has had significant and long lasting consequences for all corners of the industry.

The Government has not been able to maintain any consistency in meeting its energy efficiency targets, and has continually adapted and changed policies, targets and initiatives resulting in dramatic peaks and troughs of refurbishment contracts. The industry simply cannot sustain this constant influx and departure of work and the Government’s efforts to stabilise the uptake of its schemes through the Green Deal Home Improvement Fund (GDHIF) was a widely acknowledged failure. The GDHIF’s sudden closure after just six weeks was testament to a scheme not fully thought through by the Government. It was yet another shining example of incentivising the mass consumer market to install their own energy saving measures, which many could likely afford to fund themselves anyway, rather than concentrating funding on the people in fuel poverty, the people in most desperate need of energy efficiency measures.

I cannot stress enough, that the Government must address the UK’s fuel poverty crisis as a matter of urgency, especially since industry estimates forecast that the situation is likely to worsen. The proportion of people who can’t afford to adequately heat their homes rose from 6.5% in 2011 to 10.6% in 2013, making the UK one of the worst performing countries in Europe. This is simply unacceptable and the Government needs to realise that the only way to bring these households out of fuel poverty is to ensure their energy bills are permanently reduced through a more energy efficient dwelling.

DE It’s easy to attack the Green Deal and it’s also a mistake to attack the Government for stopping it, because it is continuing, just without Government financing. It was flawed from the start – the finance mechanism is very bad, you might as well go to a bank and get some funding at a fraction of the interest rate. Why is it possible for a student to get an £18,000 loan on a very low interest rate, but they can’t get the financing for the Green Deal right? If they got that right they wouldn’t even have to advertise because there are commercial companies out there doing that.

There are other issues Government needs to address in its current review of the Green Deal which Peter Bonfield of BRE is undertaking. One is that the process must be streamlined – there are too many layers and stages. Secondly, the point of entry in terms of cost is too high, meaning people were having to invest without being sure they could make savings, and they might have been sold a duff service by a company who knew the customer was not eligible for any of the criteria. The point of entry should be zero cost outlay, and then the commercial organisations trying to just make a fast buck will be weeded out.

CH Government policy has created the perception that refurbishment using insulation is something that has been provided at low or no cost for so long that once the subsidy is removed those able to pay do not see the value. Making a link between the EPC rating of a building and its respective Council Tax, stamp duty, or business rates would provide an incentive. Past policy has for too long focused on filling cavity walls and rolling lofts, and complicated or hard to treat buildings have been stacking up as a result. What we have left now is not only an issue of scale, but also complexity. So in the light of this, policy must make sure hard to treat buildings are prioritised.

SDG In contrast, Government policy has created an increase in refurbishment work, in particular because of the ease of permitted development rights. Through government intervention, introducing the size limit of extensions, which falls within permitted development, home and business owners have taken up the opportunity to do works within the set three-year time period of the legislation.

 

Q Domestic and non-domestic property landlords in England will be legally required to upgrade the energy efficiency of their properties to at least Energy Performance Certificate (EPC) band ‘E’ standard by 2018 before they can be leased to new or renewing tenants. Are the regulations too limited in scope – should we be aiming for more ambitious targets?
DE Whenever legislation is proposed, you have to work out how you’re going to police it, and if you have the resources. If it’s going to be Trading Standards then it’s not going to happen, because they have the likes of people traffickers, counterfeiters and drug dealers to worry about – whether or not a property energy assessment is an E or an F isn’t really at the top of their list. The agency side of the industry isn’t regulated so that is probably not an answer.

It has been hard enough for the Government to enforce having EPCs at the point where a property is completed or at the point of sale or rent, we’re nowhere near there on that. If the professionals involved there can’t make that happen then I doubt that a standard for landlord upgrades can be enforced currently, no matter how positive the idea. We need to regulate the lettings industry in a similar way to how the financial industry is now regulated, checking that everything is done currently.

“Use of BIM is something of an indulgence in the refurb sector – it has to make a case in the new build sector first” – Chris Hall, BRUFMA

SDG The regulations may be limited in scope, yet it is a good start to introduce this area of legislation to domestic and non-domestic landlords. Over time, the targets would probably need to be re-addressed, yet the current position should not be too onerous.

BD The legislation is far too limited, not just in relation to the required standards, but also the sector it applies to. While Band ‘E’ is not a particularly high standard to achieve – ideally we should be looking to upgrade properties significantly to ensure that homes are ‘future proofed’ – the question needs to be asked as to why this improvement is purely focused on domestic properties, since there is no requirement for private, education and commercial sectors. These types of buildings should not be exempt from energy efficiency improvements and actually including them in energy efficiency legislation would significantly assist the meeting of carbon reduction targets.

 

Q Can you give any recent examples of projects that have drastically improved the energy efficiency of a property post-refurb, and what challenges were there to achieving this?
SDG We worked with another design company supporting a multiple residential retrofit project with the intention to upgrade the building to meet EnerPHit standard (retrofit equivalent to Passivhaus). The main challenge was that the building envelope would increase from approximately 300 mm to 650 mm. A large structural framing system was incorporated into the design to support the weight of the additional insulating wall and roof elements.

BD Wetherby has completed a great number of one-off projects under the GDHIF scheme, in which the installation of SWI significantly reduced U-values to at least 0.30 W/m²K, bringing them in line with current building regulations. We faced the challenge of downscaling our operation, while ensuring that we still provided the same quality, service and delivery for a one-off customer as we do on our larger scale refurbishment schemes.

One of the main problems with GDHIF was that it became an ideal opportunity for many installers working outside the typical ‘refurbishment industry’, who saw it as an opportunity to capitalise on the scheme, yet did not have the wealth of experience or proper qualifications required to do the works. For a long time, we felt the need to protect the industry’s reputation and we certainly did all we could to ensure consumers received a quality installation. It was crucial that every project was approached systematically and we insisted on site visits, accurate U-value calculations, surveys and fully trained installers carrying out the works.

DE A project we worked on for an NHS client included selling and refurbishing old hospital buildings into residential accommodation, as well as building new apartments on the site. Interestingly, it revealed that the client had a number of unused properties they didn’t actually realise they had, and some which had no planned function. Fabric upgrades which were undertaken to existing buildings increased the energy efficiency of properties by a factor in the region of 30-40%.

Q Have we reached a point where it might be easier and more cost-effective to refurbish existing buildings for residential accommodation in the public or private sector, than build new on increasingly scarce land? Please provide examples where possible.
CH In areas of high demand I can see the sense in such an approach. However, a lack of affordable dwellings is an issue. If such an approach could produce dwellings at a lower cost, that would be a sensible way forward.

SDG I think there are pros and cons of both construction routes. With existing buildings, current space standards and energy efficiency levels means that a high level of work is required to comply with achieving these requirements. It is important to acknowledge that new build construction can design in these standards from the start, including specifying construction systems and materials which are readily available, and can create an efficient, well designed accommodation.

BD There is definitely an argument to always pursue the avenue of refurbishment first. We have been involved in countless projects in which aging properties were due to be demolished to make way for new developments that have had their lifespan extended by 20-30 years following extensive refurbishment.

A strong example is a CESP scheme that was undertaken in Kirkby, Merseyside, which saw more than 2,450 privately owned properties benefit from energy efficiency improvements including SWI, new boilers and loft insulation. In addition to saving these properties from demolition, the refurbishment upgraded the energy efficiency of each property in line with current building regulations and brought many households out of fuel poverty with homeowners now saving approximately £375 annually on their fuel bill. The regeneration also resulted in a saving of 267,000 carbon tonnes within Kirkby town over the next 30 years.

DE The amount of unused stock we have is startling when you look at our housing needs in the UK. Using the existing facade and/or shell must mean that it is easier and more cost-effective to refurbish existing buildings rather than building from scratch, including putting new foundations and services in.

 

Q In your opinion, how can the industry best engage directly with end users/clients to promote the benefits and encourage greater uptake of retrofit measures?
BD The issue is more with re-engagement, which is harder than gaining initial buy-in. The industry put a lot of investment in consumer and client engagement when the Green Deal and ECO schemes launched, but this momentum was lost when the funding got cut.

The NIA do a lot of positive work in engaging all corners of the industry, from consumers to contractors and installers to end clients, but it should not be left as a task solely for the trade associations to deliver. DECC and the utility companies should have a responsibility to increase the level of support and engagement offered and work with the industry to encourage the uptake of retrofit measures.

“The deal that was struck with the utility companies in December 2013, which resulted in the subsequent cuts to ECO, has had significant and long lasting consequences for all corners of the industry” – Bob Deane, Wetherby Building Systems

DE Leading manufacturers such as Saint-Gobain are making some big inroads here, communicating more directly to customers to engage them with the wider benefits of specifying products for upgrading the building fabric to enhance the comfort as well as efficiency of their homes. The paint industry and glazing manufacturers have similarly seen the opportunity to get the message out recently, but more needs to be done to lever consumer interest for refurbishments.

CH Quite simple – effective marketing with strong messages. The double glazing industry manages quite well, and the energy savings from installing double glazing are relatively poor compared with applying upgrades to the building fabric.

SDG I refer back to the changes in current permitted development rights. This really is a great opportunity to promote the ability to complete construction projects in a timely period, by taking full advantage of the current legislation.

Q Is BIM being used to good effect yet in refurbishment? How does it help to navigate around the complexities of an existing building, for example public sector or commercial buildings?
CH Use of BIM is something of an indulgence in the refurb sector – it has to make a case in the new build sector first.

SDG BIM is effective in the refurbishment sector. Incorporating 3D technology to get the design team to work together much more efficiently is excellent. The technology helps to model and highlight existing structures and services which are required to be incorporated into the architectural design. Understanding these components from the start of a project saves both time and expense in designing and constructing the project in the long term.

 

Q Approximately how much of your work is currently in the refurbishment market, post-recession? Has the new build aspect begun to recover its position, and if so, in what sectors?
BD Approximately 85% of our current business comes via the refurbishment sector. While the new build market is steadily recovering, which is very positive, there has been a significant shift in the construction of new build projects. A lack of skilled tradespeople, combined with material shortages and the time and costs associated with traditional builds, has led to rapidly increasing numbers of modern methods of construction adopted, with steel and timber frame and modular building techniques becoming standard in some sectors.

Over the past 12-18 months, we have seen a significant rise in our SWI systems specified for new build education projects, which generally use steel and timber frame construction methods to address the skills shortage issues and help to meet ever stricter build deadlines and budgets.

SDG Approximately 90% of our work is currently in the refurbishment market. The new build aspect is starting to recover its position in the housing and commercial sectors, but there are already so many buildings, particularly in London, which require upgrading and can be converted.