Breathing space for developers

Breathing space for developers?

 

The Department for Communities and Local Government launched a consultation this summer proposing to introduce the ability to extend the time limits for existing planning permissions, to be introduced on 1 October 2009.

With effect from August 2005 the Planning and Compulsory Purchase Act 2004 amended the default period for the lifetime of a planning permission from five to three years. The intention of the Act was to help reduce uncertainty and increase the speed of planning applications for development.

However, developers have been struggling during the recent economic downturn and have been pressing for the time period for planning permissions to be reinstated to five years. As a result of the recession, developers have been forced to put development projects, for which planning permission has already been granted, on hold. For many developers it is not practical to commence work within the current statutory three year period and they now risk losing those planning permissions. A longer period would be more reasonable and would give developers the opportunity to source additional funding and avoid extra costs associated with having to resubmit applications after three years. The fees for submitting a new application can be up to £250,000 and developers are not in a position to risk additional funds in reapplying for planning permissions. If the lifetime period for a planning permission remains at its current three-year period, development projects may be abandoned. Concerns have also been raised that unless there is some flexibility to extend the lifetime of a planning permission, the property industry may not be able to take advantage of the economic recovery when it eventually comes.

The decision to consult on the introduction of new rules to allow planning permissions to be extended for a period of up to three years has been welcomed by the property industry, in the hope that it will help developers who are suffering in the current economic downturn. However many think the new rules will not go far enough. It is anticipated that only one extension period will be allowed per permission for a period of up to three years and the rules will only apply to major developments which were granted planning permission before 1 October 2009. It is also expected to be a temporary provision which will be kept under review. It is not anticipated to be the permanent solution that many developers were looking for but it may serve to kick-start a stalling property and construction industry.

 

 

For further information on the content of this article please contact Caroline Hayward 

 

 caroline.hayward@borneos.co.uk

 (01908) 696002