Airspace development has been a hot topic for a while now and in urban spaces like London and other cities this is an efficient way to tackle the housing shortage and unlock value of existing assets. The sky is the limit – literally. We discuss the benefits of airspace development further in our previous article.
We are seeing more small-scale upwards extensions following the support by the Government in August 2020, when airspace development achieved specific permitted development rights. This created a new class of rights allowing two additional floors to be built on certain buildings to provide housing without the need to obtain full planning permission (though prior approval is needed before commencing such development).
Four years on and these specific permitted development rights were recently reviewed by the Government in an aim to ensure that they are fit for purpose and provide sufficient flexibility. The recent consultation on permitted development rights sought sector-wide opinions on the Government’s intention (amongst other things) to:
- allow more buildings to benefit from the permitted development rights by making buildings constructed before 1 July 1948 eligible to invoke these rights;
- streamline or simplify the prior approval process to support the delivery of new homes; and
- consider how existing leaseholders in the building can be further safeguarded.
We will be watching for the outcome of this consultation, and we hope that more buildings are eligible for permitted development rights but that an appropriate level of scrutiny remains to ensure the existing buildings are structurally capable and the new homes built are of good quality and adequate in terms of size and use of space. We welcome the Government’s consideration into safeguarding existing leaseholders especially in terms of building safety and fire safety.
The impact on and opposition from existing tenants are usually the factors driving developers away from this area however early engagement and transparent communication is key. There have also been advances in modern methods of construction and new homes warranties which are slowly fuelling desire in this (air)space. For those still not convinced, there are also other innovative ways to utilise the airspace above a building such as creating a rooftop garden or amenity space which is known to enhance the value of a building and benefit the local community or creating green roofs which is a great way to contribute towards ESG targets and sustainable development goals like preserving biodiversity. Such roof-top conversions however do not benefit from permitted development rights and full planning permissions must be sought.
Now is a good time to consider looking at any roof space you own and seeing it as an asset rather than a liability requiring significant capital to maintain and eventually replace. Properly applied and carried out, such development can have profound impacts on housing goals in the future.
Building on top of existing buildings has a reputation of being very challenging due to logistical practical and legal issues as well as the need for novel approaches. With a breadth of knowledge and expertise within WS, we can work with you to navigate potential legal and practical issues such as:
- Ownership of the airspace;
- Existence of any leaseholder or third party rights;
- Structuring the documentation needed for an airspace deal;
- Considering statutory rights such as right of first refusal;
- Collateral warranties and construction issues;
- Lender requirements and financing;
- Management of the building; and so on.
If you would like any advice on the legal aspects of upward extensions and airspace development, please get in touch.