When introduced within the Town and Country Planning (General Permitted Development) (Amendment and Consequential Provisions) (England) Order 2014, there was an expectation that a number of conversion projects on rural estates, which had not previously been viable, would qualify. Interestingly, only 6% of estates participating in the Survey have utilised the Permitted Development (PD) route to date.
With diversification vital to a rural estate, we look at the benefits of Permitted Development.
Our survey results demonstrate that those estates which have a range of assets continue to be resilient while farm incomes have been exposed to volatility. Given the importance of diversification, within the 2015 survey we explored the opportunity that changes to General Permitted Development Rights represent for rural estates.
"Rural estates are in a strong position to weather the current pressures on farm incomes"
Sophie Barrett, Savills Research
Permitted Development
The main factor limiting the use of the Rights by estates is designations (mentioned by 30% of respondents) – any suitable buildings are either listed, in a Conservation Area or an Area of Outstanding Natural Beauty.
Furthermore, 26% of respondents stated that lack of suitable buildings prevented utilising the Rights.
Of those that made applications, 50% have been successful via the PD route. It appears that some Councils are more receptive to applications than others. Also some estates have chosen to complete full planning applications for buildings, which could qualify under PD seeing little financial benefit for doing so (mentioned by 7% of participating estates).
Significant benefits
However, there are significant benefits of following the PD route. These include no requirement to prove that the building is capable of conversion without major rebuilding and it also removes, in most cases, any potential affordable housing requirement.
In addition, the increased development and housebuilding activity may create substantial capital performance for some.
Another area of significance to the future viability of rural estates is the lack of high speed broadband. We believe that it is probably the most important single factor to unlock future rental growth. Estates are innovative and several are finding ways to overcome this obstacle without waiting for the Government’s promise – see Broadband Case Study for details.
Rural estates, which have a range of property assets, are in a strong position to weather the current pressures on farm incomes while maximising the opportunities to generate income from non-agricultural assets and enterprises.
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