Planning – A Double Edged Sword
1st October 2019
This morning I heard from our planner, regarding planning permission for a freehold building in Hackney. We have been seeking planning since mid-2016, so over three years. From memory the planning application got refused and then refused again on the second submission. On the appeal planning was allowed. This is hardly something which would have disrupted the street, or the character of the area, if indeed you could say it had one in the first place.
When successive planning applications are refused, one starts to doubt and lose faith in the planning consultant. As at times, the planning laws at local and national level, and the technical terms used act as a barrier to a full understanding of what is actually going on.
One only sees the fees increasing and in the case of a site, this is dead money up until the point of planning permission, at which point there is a strong uplift in value.
My experience of planning is, at council level it is very subjective, and almost whimsical. It is often entwined with local politics. Decisions are made by people who have varying degrees of planning knowledge and they have the God like ability to impose their subjective opinions on the fate of planning.
The saving grace in this process is when it goes to appeal the decision is depoliticised, and tends to be taken more objectively; which was the scenario with this appeal.
Often planners will advise the planning application will fail at planning but will pass on appeal, as the forces at local level will be too prohibitive to overcome. This was the scenario of an eight acre site we were looking at in Tring. The village was too conservative to allow something of such a size to pass. The councillors would have backed their constituents and refused planning. However, at national level on appeal they would have passed the planning application, as the council is very behind on its housing supply therefore it cannot refuse any application, unless there is a strong material reason to do so.
On another case, we had to spend nearly two years simply negotiating the S106. This is the amount of housing and money we have to give for social housing. The council started off at 50%, they decided to simply wait until we caved in. This was their strategy for ‘negotiation’.
Planning is an uncertain game, however, the returns can be very lucrative. It is in this space where the actual property magic happens. By changing the usage of a piece of land or building you can multiply its value several times over.
From an investor’s point of view the less variables in a deal the better. There is a way to benefit from the gain from planning whilst reducing the downside. One can achieve this by concentrating on permitted development. This is not simply office to resi conversions. There are many more clauses within this heading which can allow one to change the usage of a building within a 56 day period; that’s less than two months. By using these rules one can come in and out of properties in a more predictable and easier fashion.
Only today the Housing Secretary has committed to further increasing the bandwith of permitted development to include a two storey extension to detached houses without the need for planning permission.