9 December 2020
Residential and rural property update - December 2020 – 2 of 4 Insights
Six months of COVID-induced lockdowns and a sea change in home working patterns – coupled with a new-found appreciation of localism – has led many to scope out the potential in their own homes. If you don't want to move (and provided budget and structural integrity can take the strain) an obvious place to look is upwards.
Pressure on the housing market more generally meanwhile has led countless freeholders and developers to peer up the ladder to rooftop development, encouraged by the promise of dramatic deregulation in planning laws. But whether you are a space-strapped homeowner, or an investment-minded residential landlord, what key things should be considered?
For several years now, the UK government has gazed at the city skyline and imagined new levels of dwelling in a bid to sate a seemingly relentless hunger for homes. Back in 2018, the former Housing Secretary Sajid Javid set the scene for upward urban development, explaining that it made sense to capitalise on existing infrastructure and avoid incursions into the greenbelt. Then, earlier this year, Javid's successor Robert Jenrick unveiled a Planning for the Future White Paper that was revolutionary.
Homeowners, as well as freeholders of purpose-built residential blocks constructed between 1 July 1948 and 5 March 2018, would be able for the first time to put an extra two storeys on their buildings without full planning permission. A certificate of lawfulness is still required but rooftop development is no longer the preserve of those with enough patience or budget to pursue planning approval; since August 2020, it is a right.
Critics were quick to point to some objectively disastrous conversions carried out under another recent permitted development shakeup – the blanket "office to residential" permission introduced in 2013. But arguably, for society's sake, there is a considerably lower chance of this latest move generating low-quality, poorly-designed living space.
From the drawing board, new square footage on top of a building will be designed and built for dwelling, and it's located in what already amounts to a residential setting. Provided that the developer thinks properly about building regulations and the feeding of services (even the reach of reliable wi-fi connection), the scene is set for a successful wave of new dwelling spaces.
Aside from planning or practical considerations, it pays to think early about various important legal questions:
If you occupy any building as a leaseholder, it's vital to check the terms of your lease to ensure you are permitted to redevelop. How far does your demise extend, vertically speaking? Does it include sufficient airspace for the upwards extension?
As a freeholder, you only actually own all the airspace necessary for the reasonable use and enjoyment of the land (an intensely practical solution to the problem of how to ensure claims of trespass by cranes but not aeroplanes). As a leaseholder, however, it might be restricted further.
If you hold a property as an investment and have already granted leases of self-contained flats (for example, to any number of short- or long-term tenants) the chances are you have covenanted to give each of these "quiet enjoyment" of their space. This legal construction doesn't refer literally to noise levels, but it does mean you can't unlawfully interfere with their enjoyment of the lease.
A rooftop development may not actually impinge on a first-floor unit, but those tenants might enjoy rights of access to the existing roof space for storage, or to locate plant, or even use a rooftop garden. Building upwards in these circumstances would put you in breach of those existing leases.
Where residential lettings have been granted on long leases and, as landlord, your intention is to dispose of roof space to a developer, the situation is further complicated by the tenants' statutory right of first refusal to this space, as enshrined in the Landlord and Tenant Act 1987.
Considering the rights and obligations in any extant letting arrangements is crucial. If you have not reserved sufficient rights of development for the building in anticipation of possible development, the first step is likely engaging with tenants.
The legal title to the building may refer to negative covenants binding the land, which place sometimes detailed restrictions on buildings sited on it. These might refer to a maximum property elevation, or a requirement to seek third party approval of development designs, particularly in residential or suburban areas. Dealing with these covenants is important, no matter how antiquated or irrelevant they may seem.
There is also a fair chance neighbours will be anxious about being overlooked by any new extension – but would building it also infringe any rights of light adjoining properties might enjoy? Assessing and measuring the impact of these is a specialist surveyor skill. It's a similar situation when party walls might be affected, and these may be located vertically as well as horizontally (such as the ceiling of the space below).
Of course, there may be other third parties who are not immediately obvious looking at the legal title or from the street. Is the rooftop already home to a telecommunications mast or apparatus? Depending how long it's been there, electronic communications operators might have rights under the Landlord & Tenant Act 1954 or the new Electronic Communications Code, which means negotiating removal or relocation.
The promise of new permitted development right clearly removes one of the major hurdles to rooftop development but, as ever, the devil will be in the detail. Speak to a member of our Residential & Rural group if you're undertaking any blue sky thinking.
by Lisa Bevan