GATEWAY 2: WHEN REGULATION CHANGE MEETS DEVELOPMENT REALITY

WHAT OUR EXPERIENCE OF TWO MAJOR LONDON RESIDENTIAL SCHEMES REVEALS ABOUT COMPLIANCE COSTS, PROGRAMME CERTAINTY AND DELIVERING VIABLE HOMES.

This year we have submitted Gateway 2 applications for higher risk building residential schemes totaling 1100 homes to the Building Safety Regulator.

The regime is doing what it was designed to do: strengthen building safety, accountability and evidence of compliance.

Our experience has also highlighted a significant challenge: the timing, cost and coordination of the work to deliver a robust set of information for approval and the implications of development viability.

In short, from our involvement in the process so far, we can see where the cost of the new system falls.

The question is not whether building safety matters. It is how to deliver the required standards within a process that gives developers and their design teams the certainty they need to move schemes forward.

The recent Prosper UK Housing Commission Report (published on 12 October 2026), led by Gavin Barwell, puts numbers to it the wider challenge.

Its findings are:

• The cost of building a typical new home has risen by around £76,000 since 2020.
• Around half of that, £38,000 per home, comes from regulation, policy and tax rather than materials and labour.
• For high-rise flats under the Building Safety Regulator regime, industry estimates cited in the report put the increase at around £98,000 per apartment.
• A 300-home Build to Rent scheme that would have made an £8m profit in 2020 would now make a £6m loss.

 

The Commission concludes that rising costs and flat values are making many consented schemes unviable. Its headline recommendation is a freeze on new regulatory burdens for at least three years, with a two-part test for every obligation: does the cost belong on new homes, and is it proportionate?

The report recognises that viability is shaped by a combination of factors, including market demand, development costs and the cumulative impact of regulation, rather than any single issue in isolation.

Its recommendations therefore raises a wider question for the industry:

How can essential safety standards be maintained while ensuring that the cumulative cost and timing of compliance do not unnecessarily constrain house delivery?

 

WHERE THE COST FALLS IN THE PROCESS

In our experience, the cost of the higher-risk regime comes less from any single requirement and more from when and how costs are incurred.

+ Costs are front-loaded

Gateway 2 requires a fully coordinated, evidenced design before construction can begin. Design and specialist input that once ran into the construction phase now has to be funded before approval is certain.

 

+ Time carries a price

Between submission and determination, land, finance and fees are committed but no work can start on site.

 

+ Change is harder to absorb

Once an application is approved, changes to the design must be assessed against the applicable change-control requirements. This can make late changes more difficult to accommodate, particularly when they affect compliance or require further regulatory review.  Late value engineering, which schemes have often relied on to protect viability, can therefore become slower and more costly to implement.

 

+ Appraisals are always behind the latest rules

Schemes typically take two to three years to move from viability appraisal to Gateway 2 submission. Changes introduced in that period land on budgets fixed before their cost was known.

 

+ What has made the difference

Whether a freeze is the right answer is a question for government. Safety standards are not up for negotiation, so for those of us delivering schemes now, the question is how to keep the cost of compliance to what is genuinely necessary. On our current schemes, three things have made the most difference.

 

+ Cost as a design input, not a check

On most schemes, the design develops and the cost plan follows, often weeks behind. By the time a decision has been priced, the design has moved on. We work the other way round. Areas, walls, cladding, doors and materials are scheduled from the model and issued to the cost consultant at each stage, and increasingly the design options we put to clients come with their own quantities. A developer sees what a decision costs while it is still being made, not after. Contractors then price from the same measured information, leaving less to provisional sums and qualifications. On a Gateway 2 scheme, where change after approval is slow and expensive, that is the difference between controlling cost and discovering it.

 

+ One team accountable for the design and its compliance

Gateway 2 does not ask for a set of drawings. It asks the design team to prove, discipline by discipline, that the building complies, and to show who is responsible for each part. On both of our recent submissions we acted as architect and Principal Designer for Building Regulations, so the team coordinating the design was also the team accountable for demonstrating its compliance. Design issues across architecture, structure and services were systematically identified, assigned and resolved as part of the submission process, with the resulting record forming part of the compliance case rather than being assembled afterwards. For a developer, it closes the gap between the people drawing the building and the people answering for it.

 

+ Bringing the right expertise in early

Gateway 2 rewards teams that bring specialist input forward rather than adding it at the end. We assemble delivery teams with the expertise each scheme needs, working from a single source of information managed to ISO 19650, supporting the continuity of information through to handover and the golden thread of building safety information.

These measures do not remove the cost of compliance. They help make the cost viable earlier, reduce avoidable rework and give the project team greater control over programme and budget. In a market where viability is under pressure, that distinction matters.

The Commission is right to make the case for regulatory stability. Building safety must remain fundamental, but so must the ability to deliver viable homes. Our experience suggests that early coordination, clear accountability and a cost plan informed by the developing design can help reduce avoidable uncertainty. These measures cannot resolve every pressure on viability, but they can improve control over cost and programme within the regulatory framework.

The wider challenge is to ensure that regulation achieves its intended outcomes through a process that is clear, proportionate and workable in practice.