A Third of Larger Developers Seek to Engage with a Warranty Provider

Posted by Premier Guarantee on 25th February 2022 -

Around a third of developers building more than 1,000 homes a year consider buying structural warranty cover before planning permission is secured, according to new research.

 

A survey of developers carried out for Premier Guarantee revealed that, overall, more developers sought pre-planning engagement with warranty providers in 2021 than in 2020 – though the figure is still lower than in pre-pandemic 2019.

 

The findings echo Aecom consultancy’s annual London main contractor survey showing Tier 1 and Tier 2 main contractors moving away rigid, single-stage procurement to a more collaborative process involving early engagement with project partners, as they seek to minimise risk associated with rising construction costs.

 

More complex projects benefit from early engagement

 

In the Premier Guarantee survey, 44% of all respondents stated that early intervention with design input prior to construction commencing was important.

 

Having worked in partnership with contractors that have built some of the most successful major projects over the last 20 years, Premier Guarantee has long understood the benefits of early engagement.

 

Developed specifically for buildings that are six storeys and over, our major projects service provides an initial meeting during the RIBA Stage 0-2 timescale, with an early design review at RIBA Stage 3 when, typically, contractors bid for projects.

 

LinkedIn snapshot poll

 

Carried out on Premier Guarantee’s LinkedIn account from 3 February to 9 February 2022:

 

What approach are you taking to securing Tier 1 and Tier 2 (larger) construction contracts?

 

• Single-stage procurement
• Two-stage/hybrid procurement models (early involvement)
• Working more with existing clients/less with new clients
• Something else? Comment below

 

56% of respondents favour the early engagement/two-stage hybrid procurement model, while 33% prefer to nurture longer-term relationships with existing clients.

 

Warranty buyers value long-term relationships

 

Premier Guarantee’s research also showed that more than half of smaller developers (building up to 150 units per year) tend to stay with the same provider for their projects, valuing the relationship and support already enjoyed through previous work.

 

Two out of five developers building up to 1,000 units per year also tend to stay with the same provider. Two-thirds of the largest developers (3,000+ units) appoint via an approved list of warranty providers.

 

• The research was conducted by Zebra Square using a random market sample of 275 developers between November and December 2021.