Chris Baguley Blog
Tuesday 9th October 2012
The Government has recently announced moves to boost housing by relaxing the planning process.
Currently 400,000 planning applications are processed every year. Of these, only around 135,179 potential homes reach approval. Even successful applications only receive the green light after months of deliberation and negotiation.
Of course, I’m not for one moment advocating approval of applications that don’t meet certain criteria. I’m simply saying a streamlining of the long drawn-out process of approval would be a small start to revitalising the property sector.
This is fantastic news that will have a positive and direct impact on landlords. Any move to reduce the bureaucracy that’s been holding back developers has to be welcomed. The property sector as a whole will benefit which will in turn have the knock-on effect of helping landlords.
I can see the Government wants to stimulate growth by improving liquidity in the property sector.
To get all technical for a bit, the changes will mean that, for a three-year period, people will be allowed to build larger extensions on semi-detached houses from 3–6m long and from 4–8m on detached houses.
This means single-storey extensions will be granted without the need for the council’s consent. Also, commercial properties will be allowed to expand by 100 sq m and industrial units by 200 sq m. Shops and offices will be permitted to develop up to the boundary of the premises.
I’m hoping these policies will have a positive effect on small and medium-sized developers around the country. Residential landlords will be able to develop much-needed housing stock and commercial landlords will benefit from being able to extend their portfolios and expand their income stream.
I predict that more developers and property investors will buy more houses at auction as a direct result of these changes.
Why? Simply because they will be able to extend properties to accommodate more tenants and also offer tenants more spacious properties – and we all know that more attractive properties attract larger rental income.
Just think how much more rent you could add to a property with a conservatory, bigger kitchen, utility room or more bedrooms.
Currently, landlords have to wait months before getting the green light to extend properties. This move will mean they can find a suitable builder and start the work immediately. This will then have a knock-on effect on the economy as a whole as it will create more work for suppliers too.
Chris Norris, head of policy at the National Landlords Association, says his association welcomes these initiatives to improve and simplify the planning processes.
He said: “Presently, we’re not seeing enough new homes being built to meet demand. Any new proposals to stimulate housing investment should focus on increasing supply, and ensure that access to housing will not be hindered.”
Exactly my view.
Hopefully by easing these restrictions, residential landlords will be able to extend properties to accommodate more tenants and hopefully command higher rental yields, along with seeing tenants renting for longer.
Chris Baguley is managing director of auction funding specialists Auction Finance Ltd
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