The Building Safety Act and New Compliance Revenue Streams

Much of the discussion around the Building Safety Act 2022 in the fire safety sector has focused on the additional compliance burden it places on building owners and managers. That framing, while accurate, misses the other side of the equation: the Act created new, recurring revenue opportunities for fire safety businesses that are positioned to serve the compliance market it created.

Understanding those opportunities is useful context both for running your business and for understanding why buyers look closely at well-positioned fire safety operators.

Fire Risk Assessment Reviews

Since Oct 2023, the Building Safety Act 2022 has required every responsible person to record the fire risk assessment in full, and the Fire Safety Act 2021 had already widened the assessment in England to the structure, external walls and flat entrance doors of blocks of flats. For buildings within the scope of the accountable person regime, assessments need to be reviewed regularly and documented as part of the golden thread of building information.

For fire safety businesses with BAFE SP205 accreditation, this has created a recurring revenue stream that did not exist at the same scale before the Act. Clients who previously commissioned a fire risk assessment and then filed it away until something prompted a review are now operating under a framework that requires documented, periodic reassessment. That regularity is the same characteristic that makes fire alarm maintenance contracts so attractive to buyers: it is predictable, defensible, and difficult for a client to simply cancel without incurring regulatory exposure.

Evacuation Alert Systems

In England, Approved Document B, as amended in 2022, recommends an evacuation alert system to BS 8629 in new blocks of flats with a top storey over 18 metres. These systems, which allow firefighters to issue floor-by-floor evacuation alerts via control panels, represent an installation and maintenance opportunity for businesses with the technical capability to design, install, and maintain them.

For fire alarm businesses already operating in the multi-occupied residential sector, adding evacuation alert system capability to their existing BAFE SP203 service offer is a logical extension. For buyers, a business that already has this capability is better positioned to capture demand from this regulatory requirement than one that does not.

Sprinkler Retrofitting in Existing Buildings

The Building Safety Act accelerated policy discussions around retrospective sprinkler requirements for existing higher-risk buildings. While the specific obligations around retrofitting continue to evolve, the direction of travel is clear.

For fire safety businesses with suppression system capability, this represents a long-term installation and maintenance opportunity. For buyers considering acquisitions in the sector, a business with suppression capability is more strategically valuable than one providing a narrower service range.

How This Affects Valuations

The common thread across all of these regulatory-driven revenue streams is that they are structural rather than cyclical. They are created by legislation, not by economic conditions. Buyers who understand the sector recognise that a fire safety business serving the compliance market created by the Building Safety Act is buying into a demand curve that is, if anything, still increasing. That forward-looking perspective feeds directly into the multiples of profit that informed buyers are prepared to pay.