CO-OP HOUSING MAY HELP OUT ARCHITECTS IN THE UK

The fall in house prices in the United Kingdom has prompted a dramatic downturn in commissions, with some architects facing redundancy.

Hundreds of architects’ jobs could go in the months ahead as the economic downturn grips developers and housebuilders. Like the liquidity in world markets, new housing commissions are simply drying up. But how contagious is the crisis, and how many architects working in the sector will be affected?

“You are a very close knit group, so redundancy is not an easy process". “Having to make people redundant is a tremendous wrench,” says Ben Derbyshire, managing director at HTA, a large practice specialising in residential projects. Last month, Derbyshire had to lose 12 of his 100-strong staff, including qualified architects, landscape architects and support staff, after new work began to fall off.

“You run a practice like mine and you come to know people very well. You work together, eat together, and are a very close knit group. So this is not an easy process,” he says. HTA is not alone. Dozens of firms, many of which wish to remain anonymous, have been shedding employees as projects have been shelved or abandoned. Headline projects that have been halted include Ian Simpson’s Lumiere tower in Leeds, and Liverpool’s 1,000-unit International Garden Festival scheme by Carey Jones.

Design for Homes, the lobbying group for architects in housing, estimates that smaller firms in provincial areas and those dealing almost exclusively in private housing are the worst affected. “There is a real risk of people losing 20% of their staff or more,” says its chief executive, David Birkbeck.

Bitter lessons

Firms that survived the last recession in the early 1990s learnt the bitter lessons of relying too heavily on any one sector. During the intervening years, many have branched out by pursuing overseas projects or public sector work. Others have reduced their reliance on housing developers by balancing private work with social housing schemes.

With the onset of the credit crunch last year, Cartwright Pickard, a specialist in prefabricated housing design, sought to rebalance its portfolio of work away from a reliance on private residential commissions. “Last year we did about 75% residential, but now it’s 50%,” says director Peter Cartwright. “We pursued other work because there were fewer enquiries coming through.” The change has so far paid off. While the firm has put an effective freeze on employment, Cartwright insists it has been able to stave off the need to make staff redundant.

Conran & Partners has been “deliberately diversifying” its workload this time round, says director Paul Zara. “We do a lot of housing association work, and there is strong government support for that.” Despite the loss to bankruptcy earlier this month of City Lofts, an important developer partner, Zara claims work elsewhere and as far afield as Japan and Kuala Lumpur means the company will not be too badly affected.

But despite attempts at insulation through diversification, the speed with which the slowdown has taken hold is troubling many architects. One small award-winning practice based in London told BD that it has had no new housing work since November, despite being a specialist in the field.

The fear is that the redundancies seen during the late 1980s and early 1990s could return with matter-of-fact regularity. Peter Chlapowski, director at large housing practice PCKO, says: “In the previous recession the general economic situation was worse, with high unemployment and the poor performance of the economy. This crisis… has happened so much more quickly.” “Someone with three years experience is normally a pretty hot property, but companies are not taking them on”

Younger architects look likely to be among the worst affected as salary bands slip and opportunities shrink. While the pool of jobseekers increases and firms freeze recruitment, those that do take on staff are able to cherry-pick candidates.

Roger Dunning, managing director of recruitment agency Hunter Dunning says: “Firms are a lot more selective. Someone with three years experience is normally a pretty hot property, but companies are not really taking them on. People are now very specific according to their need. It’s got to be the spot-on candidate.”

The future will be “pretty tricky” for graduates who, he suggests, might be better placed looking overseas for employment. “Foreign markets are still very buoyant — United Arab Emirates or parts of Australia, Dubai and Abu Dhabi. These markets are booming, so opportunities for work are much better,” he suggests. “UK experience is the most sought-after in the world. There are visa issues but in Australia, for instance, [UK graduates] are in demand.”

HOUSING Co-operatives as an option

But the picture in the UK is not all doom and gloom. A housing market in flux also creates opportunities for reformation, consolidation and rebirth. Architects are increasingly opting to form co-operatives, where they can team up together or work independently depending on the size of the job. Andrew Hanson, RIBA presidential candidate and director of Hanson & Confederates Architects says: “You might go into a large office thinking that it is a single entity, only to find it is several businesses operating together. It enables us to pitch for quite large projects, say £5 million, without the overhead normally associated.”

Del Hossein, managing director of Adrem Recruitment, insists more businesses start up in precarious periods than in healthy times as architects released from their contracts, by choice or circumstance, set up on their own. “It’s a funny one. It is at times like this [in a downturn] that smaller practices start.”

He is advising a handful of mid-sized firms about potential acquisitions of smaller practices. “They are eyeing up smaller practices that will be short of work. You can get good staff… in one fell swoop. You can acquire a mature team. It’s quite opportunistic, but it makes good business sense. And a lot of the little guys are quite happy to be looked at,” he adds.

But as far as Andy Matthews, partner at housing architects Proctor & Matthews, is concerned, the future is “unchartered territory”. The firm’s Pathfinder project in Rochdale has been put on hold, and he has been forced to make two of his staff redundant. “The speed with which [workloads in the sector have] turned downward is quite sharp, although we know the underlying demand for housing is there,” he says.

Matthews insists that while some workloads are suffering, architects should remember that developers still have their eye on the bigger picture. “Developers are looking at long-term projects, masterplanning and outline planning for four years hence. They are taking view that the market can’t stay like this, and that housing demand is still there.”