Permitted development rights - Building plots in the sky?

Probably most people who have purchased a leasehold apartment in a purpose-built block did not consider the possibility that additional apartments might be added to the roof of the block in the future. However, since 2020 this scenario has become a real possibility, and interest from freeholders in such schemes is gathering pace.

In August 2020 permitted development rights were amended to allow rooftop extensions on freestanding purpose-built blocks of flats, with up to two additional storeys of residential accommodation. Detached houses, and houses which are part of a terrace (including semi-detached houses) can also be extended upwards. Some commercial buildings will also qualify. The Government’s thinking behind this was to provide more homes although there has been some scepticism about the number of new homes that might be created. A number of property industry commentators believe that the rights will only serve to create a “windfall” for some freeholders, and that the number of new homes that will be generated is very limited.

Permitted development rights are a national grant of planning permission which allow certain building works and changes of use to be to be carried out without the need to make an application to the local authority for planning permission. However, in the case of an upwards extension which is to create new homes, it is necessary to obtain what is known as “prior approval” from the local planning authority before the work is started. This is so that the authority can consider certain planning issues, such as transport and highway impacts, that the development may cause to the neighbourhood. Building regulations approval will also be required.

For an additional storey extension to qualify, the proposed works must fall within the parameters of various requirements which are too detailed to set out here but briefly they include conditions about the height (both of the additional storeys and the overall height of the block) and the work to be carried out to the structure.

These new rights were not without some opposition which were generally centred around concerns about the possible impact upon existing apartment leaseholders, including the likely physical disruption that might be caused by such extensions and an increase in the value of the freehold which might effectively prevent the leaseholders from buying the freehold in the future. Sir Peter Bottomley MP was particularly scathing and commented that the new rights will “wreck the lives of leaseholders who want to get their freeholds”. The Leasehold Knowledge Partnership claims that only 17% of apartment blocks are owned by leaseholders and that third-party landlords own the remainder.

Nevertheless, interest in the development opportunities that the new rights have presented has been gaining momentum, perhaps fuelled by freeholders looking for new ways to make capital from their asset, particularly given the Government’s proposed future restrictions on ground rents.

Several airspace developers have already emerged and have established a trade association known as the Association of Rooftop and Airspace Development the aims of which are to promote good practice and lobby for its members interests.

Should existing apartment owners be concerned about the new rights? Some have already expressed concerns that if their block was to be extended with additional storeys the value of their apartment could be reduced, and/or that the structural integrity of their apartment could be affected. Their available options to try to prevent the additional storeys from being built may be limited as, generally speaking, and depending upon the wording of the lease, the freeholder of the building will have the right to carry out the works given that the freehold will include the airspace above the building. However, it is probably only in those cases where there is a third-party freeholder (IE the leaseholders as a group do not own the freehold of the building) that the leaseholders may have a problem. Even then some courses of action may be open to them, such as:

• The leaseholders as a group may be able to buy the freehold of the building before any works to add more storeys are being contemplated by the freeholder.
• The apartment lease may contain some restriction upon the freeholder’s ability to add additional storeys without the agreement of the leaseholders.
• As the lease will contain an obligation by the freeholder to allow the leaseholders quiet enjoyment of their apartments, it may be possible to oppose the works if they are causing such interference with the leaseholder’s use and enjoyment of their apartments that it amounts to a disturbance.

On a positive note for those leaseholders who also own the freehold of their building (which is a purpose-built block of flats) they may be able to take advantage of the new rights to add additional storeys to the building and then take a share of the development value!

It remains to be seen just how the skyline of our towns and cities may be affected by these new rights over the coming years.

For an initial consultation or quotation regarding advice about permitted development rights in relation to additional storey extensions, please contact the Feldon Dunsmore team on 01926 954694.