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09 Jun 2021

New Permitted Development Rights | Buy-to-Let Opportunities

Over the years, several changes have been made to permitted development rights. In particular, the planning approval process. The changes aim to speed up housing construction in the sector, thus boosting the levels of stock across the UK.

What Exactly is a Permitted Development Right?

The Town and Country Planning Order, for General Permitted Development, abbreviated to GPDO, grants planning permission for specific developments. After approvals, the development is often referred to as permitted development.

Permitted development rights (PDR) allow developers to transform specific buildings without needing to submit a planning application. The national grant is a government scheme, which will increase housing stock. Like any order in place, some exceptions and limitations apply to certain plans. The rights are subject to conditions to protect any local amenities in place.

Earlier this year, amendments were made to the Town and Country Planning Order. The amended version inserts Class MA (buildings used for commercial, business and services) into Part 3 which covers Change of Use. Therefore, developers can now convert derelict commercial buildings and change their use.  

What Can Property Developers Expect with the New Order?

Several alterations have been made to the Permitted Development Rights, since its introduction in 2013. Therefore, allowing developers to convert office buildings into housing with no formal planning permission. The updated PDR will be in place from 1 August 2021.

Developments for commercial, business and service use (Class E) can transform into Class C3, residential use, without any planning permission. Robert Jenrick says this new planning system will be SME friendly, providing the ‘flexibility needed for high streets to bounce back from the pandemic.’

It is now much easier for developers to build upwards than it was in previous years. Building upwards will enable the UK to tackle the severe housing shortage it is currently facing.

Are There Any Exceptions?

To progress, developers will need prior approval. Local Planning Authorities will grant permission after considering a range of factors. These include;

  • Safety measures such as contamination risks and flooding risks
  • The building you wish to revitalise must be vacant for a minimum period of three months, before the date of the initial approval application
  • For a minimum of two years, the use of the building must have dropped in more than one class
  • The floor space of the current development cannot exceed 1500sq/m
  • Land under an agricultural tenancy will require consent from both the landlord and tenant.

Permitted Development Rights: CityRise Verdict

CityRise Verdict: How will the changes benefit developers and property investors?

The government is encouraging conversions of commercial buildings which are no longer in use. Implementing an easier process to change derelict buildings in town centres. This comes as great news for developers because of the enormous potential it brings to redevelop the city centre. The city centre has always been an area of profound capital growth, and a place where property prices climb over time.

Potentially, you could convert an abandoned nursery into a café or restaurant. Furthermore, you might even manage to revitalise an old gym or clinic into a series of homes, perfect to let out! All these improvements will increase activity in the city. Property investors need not worry as demand remains relatively high

The city centre scene is now unrecognisable. Once full of hustle and bustle, the city is now mute and quiet due to tenants leaving. Converting unused spaces will revive the current ghost towns by increasing footfall and high-street activity. Ultimately, the government initiative of rejuvenating the city centre will allow the economy to bounce back from the effects of the pandemic.

Currently, levels of demand are exceptionally high as opposed to the levels of housing stock, which are still relatively lower. As a result, the imbalance is causing house prices to sore upwards. Allowing developers and homeowners to build without planning permission, will reduce the timescales massively. Nonetheless, it will also reduce the steep disparity in levels of supply and demand. Increasing housing stock whilst demand is high will result in low vacancy rates, which comes to relief for property investors.

Create the perfect BTL opportunity.

Property developers, regardless of whether you are in the initial stages of planning or have already begun construction, we would like to hear from you. We can consult on the division of units, section 106 requirements, marketing, parking and lease terms to ensure that you are in the strongest position ready to sell. Get in touch with our Investment Consultants today. 

 

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