Partner Article

Changes are on the way for property

Keeping up to date with changing legislation is a challenge for most industries and for the property sector it’s no different.

Take the field of planning. The Government has changed the face of this during the present term of office. Hundreds of pages of planning guidance have been replaced by just 57 pages of the National Planning Policy Framework (NPPF) in a move designed to remove the administrative barriers to development, increase and speed up the number of schemes being progressed and reduce the cost of delivery.

Overall, developers are likely to find the planning process much more streamlined which can only be a benefit to all those involved.

Community Infrastructure Levies (CIL) will require the close attention of those involved with construction as this new measure could affect development viability, especially here in the North East, where property prices are low.

CIL will be a fixed, non-negotiable charge per square metre on developments which can be redistributed throughout the region to where improved infrastructure is required. The draft charging schedule shows charges of £88psm in Zone A and £14psm in Zone B for residential developments and up to £128psm for some commercial developments.

However S106 agreements, which are planning obligations negotiated between councils and developers that must materially relate to the development site, will continue to be used by planners to secure affordable housing and other site-specific obligations such as parking and pedestrian access.

Going forward, sustainability will continue to shape the built environment and the Energy Act 2011 is the UK’s latest interpretation of European-wide commitments. As a result of this the Green Deal, which, despite delays, should be in operation by the start of 2013, will enable retrospective improvements to be made to residential property without any upfront costs. This is achieved by bolting on a charge to utility bills which will help repay the costs over the lifetime of the product. However, how this will operate in practice, say with the changing of property interests between tenants and owners, and the ever-rising cost of energy, may affect take-up.

The Government is likely to continue to create legislation that will affect the efficiency of existing property. Energy Performance Certificates, which are required when transacting property to show the building’s energy efficiency, will be changed to make them more relevant and will demonstrate savings in currency, rather than carbon emissions, while it will be illegal from 2018 to let property with a rating of below ‘E’.

This is important when you consider that 50% of property which stands today will still be in existence come 2050.

With this in mind, landlords and their advisers would be wise to work together with tenants to proactively manage their portfolios.

This was posted in Bdaily's Members' News section by Kevan Carrick .