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A Guide On Permitted Development And Funding Them Uncategorized

Gaining a permitted development (PD) enables the homeowner to carry out specific development projects without the need to apply for planning permission. 

It can help homeowners to make significant improvements to their home or amplify the possibilities of new investment.

They were introduced to tackle the UK housing shortage, by allowing development projects to happen more quickly.

To realise the maximum potential of PD, you should wholly understand everything involved and how to qualify for one. The law changes regularly, so you should remain informed of this.

Permitted Development is presented as General Development Planning Orders (GDPOs). 

They are granted separately by the devolved nations.

It is strongly advised to establish whether or not your suggested project is a Permitted Development before starting the project. Your local authority or a qualified surveyor will be able to advise you.

Do I Have Permitted Development Rights?

It is relatively easy to qualify for permitted development rights. However, the record is not cleared when you purchase a new home. 

Any projects completed by previous owners since 1948 will be on your record for Permitted Developments.

Your Permitted Development may be restricted or taken away if your property is in a designated area like a national park or conservation area.

The removal of these rights is intended to protect the distinctiveness of such areas. 

This may also apply if the property is listed.

Furthermore, if you intend to build a property yourself to replace a dwelling or the proposed project is bigger than the property already on the site, then getting full permitted development rights may be difficult.

It is important to remember that all Permitted Development requirements apply to the property, as it was built originally or in the condition, it was on 1st July 1948.

Flat and maisonettes do not apply to permitted development rights due to the fact that any changes to the property will most likely affect neighbouring homes.

2019 Changes to Permitted Development Rights

The regulations were relaxed in 2012, which encouraged Development and eased the pressure off on the planning departments which process applications.

The significant change made in 2019, has enabled individuals to build more significant extensions based on former the approval process. 

This removes the anxiety of their formally temporary provision expiring and solidifies a builder’s right to build bigger rear single-storey extensions under Class A.

Categories of Permitted Development Rights

Householders are permitted to do the following under permitted development rights:

Rear Extension

  • Cannot extend further than the back wall of the existing property by 3m if the home is attached or 4m if detached.
  • Must use homogenous building materials to the existing property
  • Exists in less than half of the size of the land surrounding the property as it was on 1st July 1948
  • Does not exceed 4m in height
  • Any eaves or ridges are not higher than the property.

Side Extension

  • Must use homogenous building materials to the existing property
  • Exists in less than half of the size of the land surrounding the property as it was on 1st July 1948
  • Occupies under half of the original property’s width
  • Is smaller than 4m (or under 3m if within 2m of the home’s boundary)
  • Any eaves or ridges are not higher than the property.
  • Two Storey Extension (Single Storey Homes Do Not Apply)
  • The Development should not include any windows in the wall or any roof slope of side elevation.
  • Takes up under half of the width of the original house and land surrounding
  • Must use homogenous building materials to the existing property
  • Any eaves or ridges are not higher than the property.
  • Terraces cannot be more than 3.5m taller than the next largest terrace.

Garage Conversion

  • Any development must be within the garage.
  • Must use homogenous building materials to the existing property
  • Cannot increase the building’s size

Loft Conversion

  • The building is allowed up to 50 cubic metres for additional roof space in detached and semi-detached properties.
  • Must use homogenous building materials to the existing property
  • It cannot involve a window in any walls or roof slope.
  • The roof pitch of the main section must match those of the home already there.
  • There must a dormer wall at least 20cm behind the existing wall.
  • Cannot have windows that do not open if under 1.7m from the floor
  • Cannot have frosted side windows

Constructing a new storey or flat on to your home

  • Windows in the wall or roof slope of the side elevation in new floors are not allowed.
  • On buildings with multiple floors, you can build an additional two on the highest storey.
  • The newly extend property cannot exceed 18 metres in height.
  • Terraces cannot be more than 3.5m taller than the next largest terrace.

Permitted Development on Commercial Buildings

  • Industrial buildings and warehouses can be erected, extended or altered under permitted Development.
  • However, restricts naturally apply, and no new building can be larger than 100 square metres.

Prior Approval Versus Permitted Development

The new changes made to the law in 2020, included the introduction of a new planning process known as ‘prior approval’.

Whilst permitted Development enables homeowners to build without the need to complete a planning application; prior approval requires homeowners to allow the local authority to assess any proposed projects.

Projects that necessitate prior approval include:

  • Building further storeys
  • Bigger rear extensions

Under the new law change, the local authority can judge whether or not your plans meet the tight guidelines and gauge how the Development will affect the surrounding area. 

On average, this process will take around eight weeks and cost £334 for every new dwelling house.

What are Lawful Development Certificates?

A lawful development certificate proves that your building project was legal at the stage of construction to your local authority as well as any future buyers. 

It safeguards you if the planning policies happen to change. These certificates are not required by law but are highly recommended.

On average, the approval process for these certificates takes eight weeks. The fees are as follows: £103 in England, £85 in Wales and £101 in Scotland.

Funding Permitted Development Projects

Projects under property development rights can be funded using several financial products. These include:

Buy To Let Mortgages:

Available from the UK’s high street banks, these mortgages are designed for individuals who purchase an investment property, intending to put it on the rental market instead of live there.

Buy-to-let mortgages are typically more expensive than available mortgages and necessitate deposits between 25% and 40%. The majority of people get an interest-only mortgage.

Under buy to let mortgages, the property owner only pays the interest on the loan monthly, which is usually generated from the rent generated. Payment of the total mortgage is made once the contracted term ends.

100% Development Finance:

As the name suggests, the lender gives 100% of the necessary funding needed to acquire the site and finish the build. 

Following the sale of the project, the profits are split between the lender and the developer.

However, this type of funding is not accessible to everyone and is usually just granted to seasoned developers that already have planning permission.

A high gross development value, typically over a million and promise of robust returns are a requirement to acquire this type of funding. Interest charges are dependent on the lender.

Due to the risk involved with this type of finance, lenders generally only want to work with experienced developers. These lenders also tend to specialise in property and property development.

Find out more about 100% Development Finance

Bridging Loans:

This finance option can enable homeowners and developers to access funding very quickly, for a construction or renovation project, bridging the financial gap until the property is sold or a longer-term option is established.

They are particularly beneficial for developers because they are often granted for properties deemed as unmortgageable. 

Mainstream lenders will rarely approve finance on a property without a working kitchen or property, which is particularly useful for those renovating a property as they may encounter a cash flow problem after they have taken out an essential part of the property.

Bridging loans are also approved on so-called non-standard builds.

This may include something as simple as walls made out of glass. Nevertheless, these builds are challenging to get approved under Permitted Development.

Bridging loans enable lenders to buy, build and raise funds when needed; however, it is essential to note that these loans are only a short-term solution and involve high-interest rates and risky collateral.

Once a property is habitable, the developer can apply for a standard mortgage.

Find out more about bridging finance

Commercial Mortgages:

Any loan secured on property which is not the where the owner lives is known as a commercial mortgage. 

Commercial mortgages differ from regular mortgages. Unlike standard mortgages, commercial mortgages do not usually involve fixed rates but do apply higher rates of interest.

In addition to this, with commercial mortgages, the interest rates tend to be more favourable than standard business loans as collateral in the form of property is a requirement with business loans. 

This interest may also be tax-deductible and increasing the property’s value could also increase the borrower’s capital.

For more information about property financing contact Property Finance Partners on 020 3393 9277 or email us [email protected]

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