Moving on Up - Albeit slowly

07 October 2019

The potential for Airspace development took a welcome step forward last week when the Housing Secretary Robert Jenrick announced at the Conservative Party Conference in Manchester that it is government policy to "make bold changes to the planning process" to enable homeowners and developers to unlock this valuable space above existing buildings. 

These proposed policy changes are not strictly brand new. The National Planning Policy Framework published in July 2018 and revised in Feb 2019, make reference to “land and airspace”, and there has been a positive trend since then which recognises the potential of this untapped real estate mostly in our city centres and especially in the London market.  

For various reasons (I don’t want to mention the “B” word) government and local planning departments have been slow to implement this change.  However, as I write momentum is building as this policy gains traction within Local plans and the London plan in particular. 

Research shows that roofspace/airspace development of only one extra floor across viable sites in London alone can supply up to 180,000 homes to the market, and on a national level this type of development will go a long way to addressing the current national housing shortage. 

Apart from the additional uplift of value to private developers, landlords, and freeholders, the potential for the delivery of affordable homes in the heart of London is very exciting. Councils and local authorities are sitting on a large volume of real estate which has the potential to deliver housing stock to key workers - especially those who don’t want to move to the outskirts of the city or beyond, in often undesirable and inconvenient locations.

The Mayor of London and Homes England have already grasped this opportunity and have provided funding to specialist developers operating in this market. This collaboration between the private and public sectors is a good start to addressing the shortages in this area.

Specialist manufacturers like Apex Airspace and Click Above who are early movers in delivering modular construction solutions to the market have already made good in-roads into delivering sites of this type. It means most of the manufacturing element can be completed in a factory off-site, and then delivered and craned into place within days instead of months. This dramatically reduces the inevitable inconvenience to existing tenants and leaseholders while construction is taking place.

It’s not all plain sailing though. Lenders are traditionally the slowest to respond to changes in the market, and as a result, senior debt finance for development is still problematic in relation to modular construction. Legally there are plenty of hurdles to overcome too. Multiple third-party infringements need to be monitored and countered where necessary as the courts have traditionally leaned towards these types of claims on balance.

Over the last few weeks, we've met with stakeholders across all sectors including architects, planners, lawyers, manufacturers, vendors, landlords and lenders to pinpoint where the issues are, to come up with collaborative solutions to these potential problems. If you would like to be a part of this process or would like more information on debt advisory in this space we would welcome engagement.

For more information please contact me

e: stene@peritus-group.co.uk

t: 07892 728 779