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Longer Life for Planning Permission on the Cards?

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In 2004 the Government amended the law relating to the lifetime of planning permissions. Previously, under the Town and Country Planning Act 1990 where a developer had secured a planning permission this permission usually had a "lifetime" of five years.

Further, if a permission was about to expire it could often be renewed under section 73 of that Act by making a simple application. In 2005 all of this was swept away by the Planning and Compulsory Purchase Act 2004 that reduced the lifetime of permissions to three years, whilst also removing the ability to renew it under section 73. As the law currently stands the lifetime of a planning permission will, normally, therefore, be three years.

Now consider the developer's position. You have worked up a planning application and after a great deal of effort you have obtained a satisfactory planning permission. This may have cost tens or even hundreds of thousands of pounds. Suddenly the country is in a severe recession. All the commentators are saying that it may be several years before the country emerges from recession and, in the meantime, nobody wants to buy or lease on your development. What do you do?

Well you could press on regardless which could lead to financial disaster when you have spent many millions and can't dispose of your development. Or you could wait and then have to spend tens or even hundreds of thousands of pounds to renew your planning application with no guarantee that it will be granted.

Government have acknowledged this dilemma and the Department for Communities and Local Government will this summer launch a consultation to reinstate the five year lifetime of planning permissions. This is something that developers and the CBI have been pressing for, for a long time.

Gareth Owen a partner in Keeble Hawson's commercial property team strongly supports this development.

"One of the inevitable effects of any economic downturn is a reduction in speculative building. When you couple this with the effects of the changes in rating law which discourage developers from speculative building by charging rates on empty buildings, I am seriously concerned that when we eventually emerge from recession and the demand for office and factory space picks up, there will be no new high quality units available."

"This will mean an overall deterioration in the average available stock and price inflation for such quality stock as is available. This is exactly the wrong situation to encourage our emergence from recession."

"Exactly the same situation will apply to residential properties where numbers of new builds commenced are vastly down, but where demand can be expected to increase rapidly once confidence returns and mortgage availability improves - which it inevitably will."

"I heartily welcome this initiative with the overriding caveat that action must be quick. It will be no good if the legislation is not changed until 2011. By then it will be too late. Action must be taken very quickly indeed if it is to assist recovery".

For further information contact Gareth Owen by email: garethowen@keeblehawson.co.uk or direct telephone: 0114 2906255.

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