To gain a deeper understanding of the housebuilding industry, its complexities and challenges, we've been exploring the working lives of various individuals that play an intrinsic part in the sector.
In this article, Anjali Bancroft, principal associate in our Residential team, sat down with a senior in-house lawyer to gain an insight into the kind of work that is coming across their desk, as well as the highs and complexities of housebuilding that they face.
We also interviewed Rob Bridgman, partner in our Property Litigation team who helps housebuilders to protect or assert their real estate rights, whether that be getting a deal done or resolving a dispute – check out the video.
1) What's on your desk?
"I am reviewing a number of strategic options and conditional contracts to acquire various parcels of land for the purposes of residential development, which I will then report up to the Executive Board with a recommendation as to whether or not the company should proceed, coupled with the typical variety of day-to-day duties. For example, we are currently updating some existing terms and conditions with the help of an external firm, and as a result of that review, updating some of our internal processes. So, it's a broad spectrum."
In-house lawyers typically see a wide range of matters cross their desk given that they are the gatekeepers who link their company's business functions at a regional level with its decision-makers at a group level. At Gowling WLG, we work closely with our clients' in-house legal teams to ensure that deals are progressed as quickly as possible in a way that meets the particular needs of the business.
2) What is keeping you awake at night?
"The main thing at the moment is how, as a company, we keep abreast of the evolving landscape of residential development, and the knock-on effects that those changes and upcoming challenges are going to have on the industry as a whole. In particular, the challenges that housing developers are going to face in light of the Building Safety Act and the Levy. Coupled with that, are the implications of the proposed reforms to the National Planning Policy Framework (NPPF) and Biodiversity Net Gain (BNG) requirements, and how this will impact the planning process. Ultimately, these changes will have an impact on the housing sector and the ability to deliver much-needed housing."
The housing sector is facing a huge raft of changes coming into force this year as alluded to by our interviewee. The Building Safety Act, in particular, has been described as the biggest change to building safety regulation in a generation and Michael Gove has been very clear about the Government's expectations of developers in connection with the remediation of unsafe buildings.
Being well-prepared ahead of the enforcement of key legislation is essential to ensure that house builders can meet any new requirements without experiencing delays to their sites in development. You can find out more about:
3) What is next in the housing sector?
"Where do we start! There's quite a lot, as we have already touched on, but to focus on a few and outside the obvious Building Safety Act!
"We have the New Homes Quality Code, so as a company we have really been gearing up for that and that has been, from a companywide and Group Legal perspective, a really involved process. It means updating all of our sales packs and marketing to make sure that we are robust and compliant and we have the relevant processes and protocols in place.
"You also have BNG requirements that are set to come in in November 2023 and I think, going forward, that is going to impact the already-stretched planning process and, potentially, viability of sites. From both a planning and legal standpoint, we will need to be prepared for this now and undertake a review of our legacy sites, particularly where there is redundant, open land, which could be of benefit from a BNG perspective. We are also going to have to monitor those sites that we anticipate or are likely to get consent after November this year."
The New Homes Quality Code imposed additional responsibilities on registered developers around after sales service and dispute resolution, with a particular emphasis on treating customers fairly. Close to 200 developers have now registered, meaning that between 70 – 80% of the new build homes market in England, Scotland and Wales have chosen to work within the new Code to provide enhanced protection for plot purchasers. We have helped our housebuilder clients embrace the Code by assisting them with updating standard form documentation and sales and marketing information.
4) What is the next big opportunity?
"From a legal perspective, I think it centres around being prepared with robust processes in place and clear strategies going forward. We have so many changes that are looming or are already in motion. We have also had recent confirmation of the Competition and Markets Authority (CMA) housebuilding market study, so now is a great time - if not vital - to review and update our existing processes and strategies so that, as a business, we are prepared and on the front foot to embrace the upcoming changes and challenges.
"Hopefully by having robust processes and clear strategies, we can be resilient to the economic challenges that the industry is facing. In essence, I think it is about being proactive, being prepared and planning."
The CMA has launched a market study into house building in England, Scotland and Wales following concerns builders are not delivering the homes people need at sufficient scale or speed. There are undoubtedly challenges within the housing sector which affect our clients' ability to deliver new homes as quickly as they would like. By understanding these challenges and identifying potential legal and commercial solutions to mitigate their effect, we help our housebuilder clients to remain resilient and continue to deliver for their customers.
5) What is it about the job that you love?
"Well, I don't know if this is a cliché answer, but I love being at the coalface of the business. I enjoy playing an intrinsic role in helping achieve the company's strategy, at the same time as being the gatekeeper to ensure that potential risks are flagged and managed accordingly. I also enjoy the challenge and often fast-paced nature of the job despite it being a challenging market currently.
"I suppose the other side of it is how tangible the results are when being in-house and getting to see sites come to life, which is great, particularly if there have been some stumbling blocks at the outset. It's great when you see the advertisement boards up on-site and groundworks have started and you think, 'yes, it's happening'. Seeing all that hard work and effort as a team payoff is so rewarding."
At Gowling WLG, our Living team brings together specialist expertise to help our clients navigate the dynamic and complex real estate market. Like our interviewee, we thoroughly enjoy assisting our housebuilder clients to deliver homes and communities to thousands of people across the UK, advising throughout their lifecycle from start to finish.
This video was filmed 28 February 2023.
To find out more about the role we play in residential development, visit our Living page.