Why the Architecture Field is Facing a Downfall
Since graduating and working in architecture for the past 7 months, we have been exposed to the business side of practice set in reality. In other words, there needs to be a constant demand for projects by clients in order for a practice to sustain itself and continue working on new briefs. There is the challenge of finding potential new clients and convincing them why they should go through with your practice and not someone else. On top of all that, in the context of the UK, the current economic situation speaks for itself.
Stressed out Economy
Coming from 2 individuals who work in small private offices based in London, we have started to witness an ongoing pattern; the downfall and lack thereof of clients who have amazing visions for their dream project as well as the financial funds to support it. Regardless of whether an office actively carries out all the RIBA working stages, for all architectural practices it either limits the number of projects going into the construction phase or it affects the billing of clients.
As a result of this, some offices charge a certain percentage of the project fee for its services, whilst others charge for the hour. When the architect's fee is calculated as a percentage of the project value, it can inevitably put off potential new clients, especially if the works being completed have a high fee to begin with. This is not because they think the work that’ll be carried out isn’t worth the price associated with it, but more because clients do not understand how expensive construction works can get, especially now that the UK has left the EU and certain political events are taking place. These are all parameters which will affect labour and material costs as well as the feasibility of supplying items. On top of all this, methods of approaching ‘cleaner’ architecture, in an attempt to mitigate against the climate crisis has led clients to consider greener options. This new technology, although steering the industry towards becoming more environmentally conscious, also costs a lot of money.
It doesn’t even end when the client signs the contract. Clients now have to be prepared more than ever for the agreed amount on a contract to increase during RIBA stage 5, due to the discovery of actual site conditions during demolition by the contractor and structural engineer. This could be something as simple as having to request further investigations and tests into ground conditions before even beginning the new build. All of these uncertainties when living in a stressed out economy is off putting for clients, which is understandable, but what does that mean for architects?
Lengthening Projects into Phases
What could have been a project that spanned over 2 years from start to finish might become a 5 year project, but why?
The option of splitting the project into phases gives financial security to potential clients knowing they haven’t entered a huge amount of debt which they can no longer back out of. In some cases, it also ensures that the client can still inhabitate one part of the property whilst the other part is being constructed, reducing the need to move out of the property and rent elsewhere for months at a time, which adds to the financial burden. Now that it’s hard to find clients who will be able to go through with a project from start to finish all at once, they are more likely to go about work in two different types of ways.
Example Scenario
If a potential client was interested in a side extension, dormer extension as well as a full internal refurbishment, they could first proceed with all the necessary works for the side extension only and then after completion gain more financial means in order to carry out the remaining work. In this case, all work would be carried out one after the other as mini projects spread across a numerous amount of years.
Or, they could proceed with all 3 intentions up until RIBA Stage 4 (Technical Design) and only have to pay for the architect’s fee and any subcontractors dependent on the type of contract signed. Not familiar with the types of contracts? Don’t worry we’ll have some content over on our Instagram covering this soon. This way the client would not expect to cover any construction costs at the moment but when they feel financially ready, as long as the expiration of the granted planning application has not gone by, they can take the building regulations schedule and drawings to get quoted a construction fee and the project can proceed where it was last left off.
So clients, although limited, have some way of easing the financial demands of a project but on the architect’s side, this means fewer earnings and a much longer wait for not as much of a satisfying reward. You might even notice that It’s becoming a regular pattern where some practices do not take up a project purely because it won't be worth it for the practice given the amount of time that will be spent on it in conjunction with the client’s budget.
Addressing Architect’s Fees
It’s no secret that professionals in this industry have been repeating the same thing over and over again for some time now. We need to charge more for our time, value and skill so the industry can get back up on its feet when it comes to paying its employees. But trying to do that in the current climate is easier said than done. So, here we are, yet again, at a standstill because it’s already difficult trying to find clients that will take projects through all stages with current fees that we charge, let alone higher ones. It seems unlikely and unrealistic to charge more for the service and quality value that we offer, in a climate in which clients are looking to cut costs around every corner of a project or process.
It’s also important to consider that clients have a wider variety of choice in regards to hiring an architectural practice, which makes it more challenging to increase fee’s so that it is more true and representative of our time, whilst not deterring future clients.
This then really comes down to individual practice ethos, strategies and whether there's more of a concern towards having high end, large scale projects that cost more or having a higher quantity of projects within a medium price range. Inevitably affecting all aspects of an office from the work portfolio to the growth ambitions as a practice. Especially given that most places gain clients through word of mouth and having a good client-architect relationship, rather than social profiles. This raises concern that we will not be able to raise our fees in the foreseeable future. If the type of projects completed are always similar in scale and budget, does it make it unlikely for architectural fees to increase whilst retaining a good client pool?
If you are working in the industry, you most likely would have picked up on these points at your workplace, since this is not singular to practices in London but more so the architectural profession in the UK. Whilst there is a need for more value when it comes to architects fees it seems quite difficult given the economical crisis and the current climate of global events that affect our industry in many ways. So, are we on a downward spiral losing project value and quality? Will there be a change that pays our worth whilst letting projects run more innovatively in design and smoothly without phases, or will the economy always be holding back the industry, specifically in the private sector?
Let us know what you think by heading over to our instagram @archidabble and commenting under our latest post. You can also follow us to keep up with weekly content through posts and day in the life updates through our stories as Part 1 architectural assistants!
