Changes to Permitted Development Rights (PD) & New National Space Standards 2021 – 8 Considerations for SME Developers.

PD rights and new national space standards for developers: The government has laid before Parliament a statutory instrument to impose National Space Standards for new housing delivered through Permitted Development (PD). In September 2020 changes were announced around permitted development. PD rights have been widened to move beyond just change of use for things like office to residential to also include demolition and rebuild and upwards extensions of commercial buildings.  I caught up with Nick Kirby from Pegasus Group Planning Consultants to delve a little deeper into the changes and the considerations for SME developers.

PD rights and new national space standards for developers are to come into force from April 6^th 2021, where all new homes in England, delivered through permitted development (PD) rights, will have to meet National Space Standards. The legislation is exciting in terms of the opportunities it creates for developers. All schemes delivered through conversion of buildings will have to comply with National Space Standards as a minimum. The measures will mean that all new homes in England delivered through these rights will in the future have to meet the nationally described Space Standard. The Space Standard begins at 37m² of floorspace for a new one bed flat with a shower room (39m² with a bathroom), ensuring proper living space for a single occupier.

https://www.gov.uk/government/news/permitted-development-homes-to-meet-space-standards

1. Ability to deliver better-planned housing with new living working and learning spaces.

 A new series of challenges and opportunities have arisen for developers, to deliver housing that accommodates new living, working, and learning spaces, in light of the Covid-19 pandemic. With my architect’s hat on, this is welcome news because we like to provide good quality, residential accommodation for people. And I believe that from the developers’ side, the negative image of developers trying to develop changes of use into small, cramped living spaces, which has been in the press a lot over the last few years, will be no more. So, what advantages are available to developers when these regulations come into effect and what are the benefits of going down the permitted development route over and above a planning route?

2. Advantages over traditional full Planning Routes.

Change of use applications that comply with National Space Standards can avoid the normal full planning route and there will be many instances in which permitted developments provide an excellent planning opportunity to gain residential development. The change of use from office to residential for example; even if you are compliant with National Space Standards, this has significant benefits over the normal full planning application route.

3. No requirement to provide affordable housing.

A developer would not be required to provide affordable housing, which can be significant in terms of developers balance sheets.

4. Planning hurdles relaxed – Policies preventing ‘loss of employment’ floorspace will be no more.

Developers won’t be subject to the council’s policies on loss of employment floorspace.  Previously, if a developer was looking to lose, or convert, or demolish an office or industrial building, in a core employment area or town centre location, many Local Authorities would have a policy which prevented them from losing that employment floorspace unless they could prove that it wasn’t viable. Typically, that’s done through a 12-month marketing campaign, which can highlight potential interest from the market. That hurdle won’t be present in the permitted routes, so one of the key benefits over the traditional full planning application route.

5. Opportunity to convert and revitalise town centres – Post Covid.

There is still a win to be had here for developers. The stock of potential for conversion is diminished; since it first came in a while ago, the PD for converting offices has been both desirable and lucrative for many developers. We will be levelling up on the quality of housing that is coming out, but with some financial benefits to developers if they can still find a route down the permitted development road. More sites will be available with a higher yield because of location, better accessibility to transport networks and impact on local highways.

National Space Standards are quite a blunt tool. They are used in the planning process already, but only where local councils can prove that they should be used, they have a need for them to be used, and where their use will not impact on the viability of developments for developers. They use them on a blanket basis for national permitted development rights and the granular level of viability on each scheme is not taken into account. Developers will need to be careful that sites that they were taking on or appraising previously, still stack up. There is a transition period before April, where the use of the National Space Standards are not in place.

6. The GDV, and or rental income will be higher than previously because the space standards are greater.

 After the sixth of April, developers will certainly need to be take into account the use of the space standards on their appropriate appraising schemes. The advantage is that developers will be selling flats and houses that meet the new standards, therefore are worth more. The GDV, and or rental income will be higher than previously because the spaces are greater. The downside to this, is if a developer has a certain volume of existing buildings, whereas before you might have fitted say, 20 rabbit hutches in there, you can fit 10 decent sized flats in there now, so it’s a balance to strike.

7. The provision of adequate natural daylight to rooms within PD schemes

Another consideration for developers when planning out new layouts is because the government changed the permitted development rights as of September 2020; they are now in place to allow for the consideration of daylighting.  Although there is a transition period towards the use of National Space Standards in April, Pegasus Group are already considering daylighting and the provision of adequate natural daylight to rooms, within permitted development schemes, and managing daylight/sunlight reports, to show that the received daylighting is acceptable.

8. Replanning the plan – timings

If a scheme application hasn’t yet been submitted, there is some time to replan it. If it’s been submitted, then it will be judged on the previous rules. If an application has not been submitted, then the design will need to be changed to meet the new rules. Obviously, making offers and acquiring land can take some time, but in terms of business plans, there is still a good amount of time for developers to adapt their business plans to understand how they should be bidding on potential sites.

Developers: Don’t wait until 6th April – Talk to us now.

If you are a developer and you think you might need to change a design on an existing application to meet the new rules, discuss a feasibility study or any plans or schemes that may be impacted by Permitted Development and the new National Space Standards, get in touch. Enter your details below, or email me here and I’ll organise a virtual coffee and an informal chat on a Zoom call.  – Duncan Gunn.