Once planning permission has been granted, the developer or landowner should almost immediately embark on a strategy for making it permanent, says hgh Executive Director, Roger Hepher.
Market conditions are constantly changing, and the last few years have been no exception. In particular, the balance of residential values against industrial/warehousing values has shifted across London, but particularly in some regeneration areas. Add to that escalating costs and shifts in political mood, and a site that seemed very attractive for high density apartments three or four years ago may now not be viable for such development, and something quite different – perhaps final mile warehousing, dark kitchens, student accommodation – may be more attractive.
Faced with this sort of change and uncertainty, landowners are often sitting on planning permissions, waiting to decide the best way forward. The problem with this is that planning permissions expire, usually after three years.
What has changed?
In times gone by, it was possible to extend the life of a planning permission. Now it is not; it is necessary to re-apply from scratch, submitting a raft of new technical information, and almost certainly facing a host of changes in planning policy and building regulations (most of which are likely to undermine viability rather than assist it). Although this has been the case since 2009, I am often surprised that landowners and developers don’t appreciate the fact.
Nominal Commencement
There is an alternative, which is to make a nominal start to development – typically digging a short length of foundation trench, or demolishing a small part of an existing structure. Once this has been done, the planning permission is effectively made permanent provided it remains capable of completion. However, in order for this to work, pre-commencement conditions (and possibly Section 106 obligations) have to be discharged, and it takes time for the necessary material to be prepared and for the local planning authority to process applications. Deemed discharge of pre-commencement conditions helps, but only to a degree. Nominal commencement will also trigger CIL liability, although there are certain strategies that can avoid this in some circumstances.
In simple terms, once planning permission has been granted, the developer or landowner should almost immediately embark on a strategy for making it permanent. Unless you have secured a longer-than-normal validity period at the outset (which is possible), don’t think three years; think two at most, before serious steps need to be taken.
