Rural market in the East of England

Permitted Development Rights (PDR)

Whilst much hyped during early 2013 new planning Regulations came in to force in May 2013 and expire in May 2016. The extended Permitted Development Rights (PDR’s) mean that it is in many instances possible to change office use to residential use without a specific planning permission.

The statutory notice period which is part of this process can take 56 days and our preparation time is only a few weeks.

It will in all cases be necessary to make a “prior approval” application to the local planning authority. Intended to screen out buildings and land where residential use would be unacceptable in terms of transport impact, contamination risk or flooding risk, this involves notifying the Local Planning Authority of what is proposed.
Not  surprisingly, this process has been utilised by owners of redundant offices throughout the UK, but mainly in the south east

We have advised on a number of permitted development rights opportunities over the past 12 months (either as LPA Receivers or as Development Managers working with IPs) on office buildings where 100% of the up-lift in value can be captured by the secured lender.  With a joined up team of consultants the costs involved in securing the necessary consents are relatively low and can often be funded out of retained rent. 

It’s not necessary to actually implement the change of use once approved, but it can be a very cost effective negotiating fall-back with a tenant who actually wants to stay, and believe they hold all the cards!  This trend can be combined with another emerging trend in the real estate capital markets the Private Rented Sector (PRS).

Time is short as under PDR the property must be occupied for residential purposes by 30 May 2016 but there are back-up plans available once the principles have been accepted by the planning authority.

We are reviewing the strategy for a number of our client’s loans as there are inevitably trade-off considerations with obtaining the last residue of income and with dilapidations

We attach a link to Roger Hepher’s and Rupert Warren’s Guide to PD Rights in the conversion of offices to residential.

 

 

 
 

Key contacts

Julian Clarke FRICS, FNARA

Julian Clarke FRICS, FNARA

Director
Development & Regeneration Recoveries and Receivership

Savills Margaret Street

+44 (0) 20 7409 8743

+44 (0) 20 7409 8743

 

Kevin Mersh FRICS, FNARA

Kevin Mersh FRICS, FNARA

Director
Recoveries and Receivership

Savills Margaret Street

+44 (0) 20 7409 8184

+44 (0) 20 7409 8184

 

Matthew Nagle MRICS, FNARA

Matthew Nagle MRICS, FNARA

Director
Recoveries and Receivership

Savills Margaret Street

+44 (0) 207 409 8898

+44 (0) 207 409 8898

 

Annabel Sutherland MRICS, RIBA

Annabel Sutherland MRICS, RIBA

Director
Recoveries and Receivership

Savills Margaret Street

+44 (0) 20 7409 9981

+44 (0) 20 7409 9981