Resolving the ups and downs of second staircase insurance

Second staircases will be mandatory in high rise residential buildings 30 months after proposed new building regulations come into force.

In the meantime, schemes with both one and two staircases will be permitted. But how will this impact developers and lenders and how will it affect the insurance of residential developments? In this Insight article we consider the underlying issues and set out how we are working with all parties to ensure robust insurance solutions are available.

The Grenfell Tower disaster had a seismic effect on the market for high rise residential properties. Consequently, the cladding issue came to the fore, trapping many leaseholders in un-sellable and un-mortgageable flats. Subsequently, new fire safety regulations have been introduced.

Now the government is mandating all residential tower blocks over 18 meters high to have a second staircase to aid evacuation. Developers will be given a 30-month transition period from the introduction of the new building regulations during which both one and two staircase developments will be permitted.

Many developers are now in a quandary whether to stick with a one staircase design or immediately move to a two-staircase option during the transition period. Their decisions will be influenced by both commercial and safety considerations.

Fire safety is critical, but single staircase developments are not inherently less safe – particularly when combined with other fire-mitigation measures such as sprinklers and compartmentalisation.  This is further backed up in a ministerial statement made by the Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations (The Rt Hon. Michael Gove MP) where he said 

I want to be absolutely clear that existing and upcoming single-staircase buildings are not inherently unsafe. They will not later need to have a second staircase added, when built in accordance with relevant standards, well-maintained and properly managed.^[1]

Two staircase developments are far more expensive to build and equip. What’s more, the space lost to a new stairwell will reduce the number of flats which can be built on the same floorplan – potentially reducing the yield from the development.

But will lenders be willing to advance money on single staircase developments and will buyers want the reassurance of two evacuation routes? Will this impact the long-term value of a single staircase development and the marketability of flats?

Insurance is likely to be more expensive on two staircase developments as the cost of reinstating buildings will be higher in the case of loss or damage. On the other hand, will insurance be as readily available for single staircase properties if underwriters are unsure about the safety of the development?

Developers, lenders and other parties need to be confident in the choices they make. Both the one and two staircase approaches are valid during the transition period, but it will be essential there is transparency in developers’ decision making and rationale, so insurers, investors and lenders can back projects with confidence.

Good communication and record keeping will be essential so there is clarity about why decisions were made. This may include new and clearer wording in design and build contracts.

We’re working with all parties to discuss approaches, influence good practice and educate our clients and insurers about the options. This will ensure robust insurance and finance solutions are available whether the development is for one or two staircases.

Many high-quality developments will be completed with both one and two staircases during the transition period. By working together, we can ensure these are commercially successful and inherently safe for residents. If you would like to discuss this topic further and understand the implications on your business, please don’t hesitate to contact the team.

[1] https://questions-statements.parliament.uk/written-statements/detail/2023-10-24/hlws1076#