Knowledge is power
We are in interesting times. In property knowledge is power; and those in the know, and who act on the knowledge, will profit well. There are a raft of Permitted Development permissions which have been released, in addition to what is already in force.
Permitted Development is decided by central government and is not subject to the usual planning requirements; so, no local opposition can stop Permitted Development from going ahead. There is certainty in obtaining this type of planning, in terms of whether you will get the planning in and also the timeframe within which you will obtain it. The permission must be given in 56 days.
We recently obtained planning for two flats within a commercial element of a property within Permitted Development and the planning came through on the 56th Day.
With the commercial market in flux, and with more people working from home, there is less walk-in trade. Large commercial units are suffering, both the ones owned by individuals and the ones owned by large corporates. Whilst empty, the owner must pay business rates.
You will find disposals of commercial units coming up in auctions and in the general market. There has also been many changes in legislation in regards to gambling shops. Have you ever wondered why there are so many gambling premises on the high street, next to each other? Have you wondered how they are all surviving? It is because a large percentage of their turnover comes from the machines they have on site.
The law is changing, and will restrict the number of machines they are allowed. This means they will likely no longer be profitable, and will therefore need to be sold.
This wave has already started to rise, just look at the numbers which have started appearing in auctions.
One interesting Permitted Development which took effect from 1st August 2020, allows for the construction of two additional floors on a purpose built detached block of flats; i.e. the upwards extension of two storeys of residential flats on a current block within the airspace. The flats must have been constructed between 1st July 1948 and 5th March 2018.
The block must be detached and must be at least three storeys high and by adding the new storeys you must not exceed 30 metres in height.
It is interesting to note that even architects do not seem to be conscious of these rights which can be obtained easily. We have been looking at a commercial property with the intention to purchase, where the architect had taken the trouble to go for planning to get a slight extension on the building, yet had missed a couple of angles under Permitted Development.
These should have been exploited first, and then planning should be addressed. It is actually surprising how many are unaware of this knowledge.
Once value has been added to a property by rezoning its usage, you have the option to resell the building or develop out and refinance. In the current market it is probably better to develop and refinance and simply focus on the monthly cashflow, especially as rates are exceptionally cheap at the moment, the 5 year fixed particularly so.