Navigating the Building Control Crisis: What Property Investors Need to Know

The collapse of PWC Building Control, one of the biggest private building control companies, has left thousands of building projects across the UK in chaos. In this blog post, we'll explain what this means for property investors, how to handle these tough times, and what you need to do to protect yourself.

The Rise and Fall of Private Building Inspectors

In the 1980s, Margaret Thatcher opened up the building inspection market to private companies, allowing developers more flexibility and efficiency by choosing private inspectors instead of being limited to local authority inspectors. This change made it easier for developers to work across different areas by building a consistent relationship with one inspection firm.

For many developers, this meant they could avoid dealing with multiple local authorities. Instead, they could work with one private inspection company for all their projects—saving time and ensuring consistency.

However, this system recently encountered a major problem. After the Grenfell tragedy, the rules for building control companies became much stricter, with new safety standards like enhanced fire safety measures and tougher compliance requirements, such as regular proof of meeting safety benchmarks. Many private building control firms, like PWC, couldn't meet these new standards, leading to their closure and causing widespread issues for developers.

Why Did PWC Collapse?

The collapse of PWC Building Control didn't happen overnight. Several factors contributed to their downfall:

1. New Regulations: The building control regulator was replaced by the new Building Safety Regulator, which introduced tougher rules. PWC wasn't able to show that they met these rules, and their license was taken away in August 2024.

2. Financial Issues: PWC also had financial problems. Even though they made £5 million a year, they owed £10 million to creditors. This meant they were already in a bad financial situation, and losing their license made it impossible for them to continue.

3. Higher Insurance Costs: After the Grenfell tragedy, insurance costs for building inspectors increased significantly. Some firms saw their insurance costs jump from £50,000 a year to over £500,000. This made it very hard for smaller firms to survive.

What Does This Mean for Property Developers?

If PWC was your building inspector, you are now facing significant challenges. With PWC out of business, any ongoing projects will need to be handed over to the local authority for completion. However, this handover process can be quite challenging:

• No Transfer of Records: Private building control firms like PWC aren't required to transfer their inspection records to the local authority. This means developers may have to start inspections all over again, causing project delays.

• Extra Costs: You'll need to pay new fees to the local authority, even if you already paid PWC. This effectively means paying twice for the same inspection services.

• Project Delays: Local authorities are now overwhelmed by the sudden influx of projects. This can lead to delays in re-inspecting sites. If parts of your project, like steel beams, are already covered, you may need to uncover them again, adding more time and costs.

How to Protect Yourself Going Forward

With all the uncertainty in the building control industry, it's important for property developers to take steps to protect their projects. Here are some things you can do:

1. Do Your Research: Before choosing a private building control firm, make sure they are registered with the Building Safety Regulator and check when their license expires. You don't want to find out in the middle of a project that your inspector can no longer work. Also, check their financial health—if they are deeply in debt, they could be at risk of going under.

2. Keep Records of Everything: Whether you're using a private firm or the local authority, it's important to keep detailed records of your project. Store all communications, documents, and photos in the cloud. High-quality photos are especially important because they might be the only proof you have of the work being done before things get covered up.

3. Consider Using the Local Authority: Local authorities might take longer, but they could be a safer option given the current instability with private building control firms. If you do use a private firm, make sure their license will last well beyond your project's expected completion date.

4. Create a Photo Diary: Take regular, high-quality photos of every step of your project. These photos can be invaluable if the local authority needs proof of work. The more thorough your documentation, the quicker they may sign off on your project—saving you time and money.

The Road Ahead for Building Control

The building control system in the UK is under significant pressure. There aren't enough building inspectors, and new, stricter rules mean that more private firms could go out of business. Developers need to be ready for this "perfect storm" and have backup plans in place.

If you're working on a project and considering your building control options, now is a good time to review your strategy. Contact your current building inspector to confirm their accreditation and stability to ensure your project remains on track. Make sure the firms you work with are properly accredited, financially stable, and have good insurance. And remember—keeping good records is your best defense.

Conclusion

The collapse of PWC Building Control is a wake-up call for property investors across the UK. Whether you're an experienced developer or just getting started, understanding the risks with building control and being prepared for the worst is more important than ever. By doing your research, keeping detailed records, and connecting with other investors, you can ensure your projects move forward smoothly—even in uncertain times.