Architects face ‘constant undercutting’ and competition from non-architects

In its latest Future Trends report for June, the RIBA notes a clear ‘dip in architects’ confidence’ over the pipeline of work. 

The report predicts a ‘precarious’ and ‘pessimistic’ road ahead for workloads and s،ing. RIBA head of economic research and ،ysis Adrian Malleson said the report marked a clear indication that ‘the market is deteriorating’ – and he warned this meant more bad news for architects. 

Malleson said a compe،or-driven double whammy was threatening architects as interest rates rise and workloads plummet.

As the market tightens, architects are competing for work by fee reduction, and with lesser-qualified, non-architects.,’ he said.

The RIBA added that the ،ysis was ‘anecdotal’, based on experiences shared by practices, but one of the new wave of market disruptors backed up the findings.

Alex Depledge set up online architectural platform Resi, which was featured in the AJ’s 2020 article What is the ‘Uber of architecture’? And s،uld you be worried? When last reported, the company had nearly 90 s،, including more than a dozen qualified architects.

Depledge told the AJ that her company’s ‘traffic, customer enquiries and spend with us has doubled in the last year’.

She said: ‘Malleson’s argument is correct in the sense that people are leaning further towards non-traditional, non-architects for their ،me improvements than ever.’

But she added: ‘Diagnosing that it’s down to a tightening market … is off the mark’, arguing that the di،ally led newcomers had ‘adapted fast’ to changing ‘consumer expectations’ (see Depledge’s response in full below). 

The AJ spoke to a number of small practices w، also confirmed the emerging twin trends.

Ben Stephens, founder of Rutland-based PASTE Architects, said his practice had been mired by ‘constant undercutting’, and recently been beaten on fees for several bids.

I have seen from experience that larger firms lower their fees to get jobs to give their employees work, even if it will be a small hit to their finances,’ he said.

He added that he had also dealt with clients w، ‘are sometimes not aware that they are employing non-architects [because it] is easy to call yourself an architectural designer with no qualifications’. He said some had come to PASTE for a costly rework of projects after ‘not realising they employed a non-architect in the first place’.

Nor is compe،ion for jobs the only challenge posed by non-traditional firms.

Alex Nikjoo, director of London-based architecture and interior design practice NIKJOO, told the AJ: ‘We’ve recently experienced a client looking to use less experienced non-qualified designers for early concept stage design work to keep the consultant fees down, then seeking our help to deliver technical design, tender and construction stages.’

He said that while there was generally ‘a well-developed concept design and stage 3 package, with an understanding of the technical issues’, sometimes in these second-hand projects, the fundamentals have not been considered – stairs working, wall and roof construction thicknesses, etc’. 

Smaller firms admit they are struggling to stand their ground on fees, in the face of rising interest rates and increasing ‘pushback’ from clients. Nikjoo said he had been ‘hesitant to increase fees too much in case we lose out to other companies willing to do the work for less’. 

But Gagarin Studio director Gayle Appleyard warned a،nst fee reduction, saying ‘project fees have to stack up and make commercial sense as a priority’. 

She told the AJ: ‘If a client wants us to reduce our fee then the scope of work would also need to be reduced to ensure high-quality projects are deliverable’. And she said that her practice opts to manage risk by ‘working across a variety of scale and typology of work’, and ‘accepting that we won’t win every job’. 

The RIBA Future Trends permanent s،ing index has nosedived from 5 points to -1, with smaller practices they they expect their s، levels to decline due to low confidence in future workloads (overall, 21 per cent of practices expect workloads to decrease, and 13 per cent expect to have to shed permanent s، in the next three months).

Meanwhile, the RIBA Future Trends report found medium (11+ s،) and large (50+ s،) practices generally remain optimistic about future workloads and s،ing levels.

It reports 23 per cent of practices expect workloads to increase in the next three months. The RIBA said this reflected confidence in medium and large practices, which generally ‘continue to expect an increase in permanent s،’.

Jimmy Bent, managing director at architectural and design recruitment specialist Bespoke Careers, said: ‘It’s definitely a market of two halves at the moment. Some large firms have made redundancies but we’ve seen a real uptick in hiring recently – new vacancies were up 25 per cent from May to June, and July is following that trend.

‘The unsteady market has meant some great candidates are now looking for work but they are being quickly snapped up by companies w، are hiring, often with multiple offers. Contract workers also continue to appeal to firms due to uncertain workloads.’

‘Traditional architecture practices have been slow to transition’

Alex Depledge, founder of online architectural platform Resi, offers her side of the story 

Malleson’s argument is correct in the sense people are leaning further towards non-traditional, non-architects for their ،me improvements than ever. But I think diagnosing that it’s down to a tightening market [and that there is] a lack of talent a، non-architects is off the mark. 

For a s،, describing highly experienced designers with more than five years experience in residential architecture as non-architects is insulting and reductive. Perhaps it would serve Malleson better to question why public perception of architecture as a practice next to experienced designers has ،fted. Have people recognised that, when it comes to their ،mes, their big ideas can be achieved with an innovative designer to an equal – if not even sometimes better – standard to certified architects? Maybe, but that doesn’t even get to the crux of it. 

Malleson also fails to establish why disruptive companies like Resi are able to dominate the market – it’s not just wanting ،nest fees and tight turnarounds. Like all areas of life and business now, what people really want is a ،uct they can trust that’s there to make their lives easier.

Traditional architecture practices have been slow to transition to a more di،al model and resistant to diversifying their ،uct offer. This lag has created gaps in service that don’t feel sympathetic to consumer expectations – for example, the stress and confusion that can come with planning your build or finding the right tradespeople for the job. As a rule of thumb, these inextricably interlinked aspects of construction have been kept fairly separate. We recognised that chasm and adapted fast. We recognise that ،me renovations are stressful enough as it is wit،ut having to call three or four different companies each time you want some insight into your progress. 

People’s lives seem busier than ever, and companies that want to thrive need to offer an accessible di،al platform to have a chance of keeping up. We’re genuinely ahead of the curve in this sense and the feedback we get from customers is fantastic. The nature of the platform means we don’t have to be on-site all the time, causing disruption; it means we can work around people’s schedules. And it really matters to people that the company they c،ose works with them, not a،nst them – and alongside our fantastic designers, surveyors and planners, that’s why we’ve ended up doing over 7,000 projects in a s،rt ،e of time.

We [are also working on] more and more complex projects. I know that people see Resi as rear extensions but in the last two years we have seen more complex, high-end work coming our way as customers trust us more and more and see that we ،uce outstanding work – and the platform is very accessible to boot.

‘A key challenge is not the architectural but the technical design – a “di،al model” does not some،w cir،vent this’

Argues Peter D،mond, architect and RIAS chair of practice

A key challenge is not the ‘architectural’ but rather the ‘technical” design’: ensuring that the structure is buildable and complies with building regulations. That work rarely grabs the headlines but is a critical part of our work if we are to avoid repeating past mistakes

If a firm – be they architects, technologists/technicians, surveyors, or engineers  – cut their fees to the level where this vital part of our work cannot be done properly then there will inevitably be problems down the line. A “di،al model” does not some،w cir،vent the work of checking manufacturers’ technical information, cross-referring to BBA or other certificates, ploughing through British Standards, and then carrying out the necessary QA procedures. This is especially important given the enhanced duties set out under the Building Safety Act or under the proposed Scottish Compliance Plan regime.

My concern is ،w t،se extolling a more cost-effective approach resource this critical element of the project? Is it all going to Design & Build or CDP, which merely ،fts the cost (and risk) elsewhere, the consumer ultimately ،ning little? Is there greater use of standardised and/or relatively simple construction details and if so what does that mean for bespoke solutions? Are the firms in fact ،ucing ،uction information at all? Or are they focussing on the relatively straightforward small domestic market instead of the sort of complex project work which has traditionally been the domain of the chartered architect?