On this page, we discuss the inherent relationship between planning permission and Development Finance.
Planning Permission & Property Development
Having a roof over one’s head is one of the barest necessities of life. It is also one of the prime reasons why, discounting unique, world-changing events, property prices hold firm against market ups and downs. People have been investing in real estate and building ever-evolving structures for centuries. In this day and age, this idea has taken a form of an efficient, competitive and utility-driven housing and commercial property market.
Whether you are a landlord looking to let your property, a business looking to invest in a new location or a developer looking to develop a site for profit, you may already know that a lot of work goes into property refurbishment, renovation and development. In fact, some of the most important stages of such projects precede the actual on-site work. Obtaining the necessary planning permission is the first of such stages.
The allowances granted in the planning permission have a direct impact on the way the development will be carried out and the extent of support it will receive from lenders. This inevitable relationship also means that it becomes important for every developer to familiarise themselves with various planning permission scenarios before they apply for a property development loan.
What is Planning Permission?
Planning permission is an approval granted by the Local Planning Authority (LPA) for the development, refurbishment, demolition, renovation etc. of buildings/constructions within its jurisdiction.
The purpose of having to obtain planning permission before commencing property development is to ensure that the said development project abides by all the rules, norms, laws and statutes that may apply. In addition, planning permission also helps certify that the project in question complies with the standard codes of health and safety.
Apart from these objective and hard-set criteria, planning permission also takes into account subtle, subjective implications. For example, some planning inspectors may want to discuss the matter with the neighbours to see if there are any objections.
Who Grants Planning Permission?
Collecting, validating, assessing and deciding upon planning permission applications comes under the purview of specially-designated Local Planning Authorities (LPAs).
Local Planning Authorities operate as integral parts of Local Councils in most places in the UK. There exist, however, some places in which the Local Council takes it upon itself to assess and decide upon planning permission applications.
To find out the contact information of your Local Planning Authority, please visit this link.
When is Planning Permission Required?
This is perhaps the most common question we find ourselves answering regarding planning permission and property development. That said, it’s still quite difficult to answer this question in a matter-of-fact way.
As a rule of thumb, the projects that involve the following typically require planning permission:
- Developing a property from the ground up
- Changing the use to which the building is subjected
- Adding, extending or expanding the building area
- Altering the building structure in any significant way
- Refurbishing the building in ways that challenge the structural integrity of the building
If your project is to undertake any of the above, it’s quite likely that you will need planning permission from the concerned LPA. However, there are some major exceptions to these. For example, Permitted Development Rights allow for the change of use from industrial or agricultural to residential (subject to further conditions). Similarly, altering the utility of a building within the same use class is also exempt from planning consent. Please visit this page to refer to the latest use class categorisation of buildings.
Even though permitted development rights protect certain projects, any external work involved in such projects will still need to have prior approval from the Local Planning Authority.
The best way to know if your property development project requires planning permission is to seek advice from your LPA.
Who Can Apply for Planning Permission?
Commercial Finance Network removes all the hassle in getting a Development Finance package. Any legal entity (an individual, a group of individuals, a society, a trust, a corporation etc.) can apply for planning permission in the UK. The applicant can also appoint an agent or a representative to seek planning permission.
Here are some noteworthy points in this connection.
- To apply for planning permission, you do not have to own the land/building in question.
- Prior to applying, you will, however, need to inform all the stakeholders in the property you wish to seek planning permission for. This includes the owner(s), tenant(s), lessee(s) etc.
- You can submit multiple planning applications for the same property. If you receive multiple approvals, it remains your prerogative to choose amongst these the plan for development.
Planning Permission and Development Finance
As discussed here , Development Finance and planning permission share a close relationship. It is quite customary in the UK for lenders to disregard Development Finance applications that lack proper planning permission. There remain, of course, certain exceptions for which lenders can offer an ‘in principle’ loan that is subject to the project receiving planning permission.
Therefore, the best strategy for developers and landlords is to secure the proper planning permission before applying for a development loan. If you are convinced that your project is protected under permitted development rights, it’s a good idea to confirm the same with the Local Planning Authority. You can also request them to issue a Lawful Development Certificate to bolster your Development Finance Application.
You can also seek informal advice from our Development Finance experts by contacting us.
Types of Planning Consent
There exist several types of planning consent that cover various property development, refurbishment, renovation and demolition scenarios. It’s important to understand the scope and limitations of each of these types before you apply for planning permission. The most commonly used among these are discussed below.
Householder Planning Consent
Development, renovation or refurbishment work to be carried out in or around a house requires householder planning consent. Many consider this to be the most basic type of planning permission.
Typical projects that can go ahead with householder planning consent include yard extensions, garden landscaping, outbuildings etc. It’s worth noting here that projects that enjoy permitted development rights needn’t apply for householder planning consent.
Please refer to this guide to learn more about householder planning consent.
Full Planning Consent
Full planning consent is often sought by developers for projects that involve extensive work. By default, any property development work that involves creating new structures typically requires full planning consent. In addition, projects that aim to bring in effect change of use that is not discounted by permitted development rights also require full planning consent.
Typical examples include HMO conversions, flat renovations etc.
Please refer to this guide to learn more about full planning consent.
Outline Planning Consent (Pending Reserved Matters)
Outline planning consent is a tentative planning approval granted to tentative plans. It is used by property developers who wish to judge the potential of a property and the possible bumps in the road regarding planning consent.
Therefore, the applications for outline planning consent contain only the skeletal planning ideas, and not the details. Once the project has outline planning consent, the detailed plans can be submitted at a later date for further approval. Outline planning consent, in itself, does not allow for the on-site work to begin.
Please refer to this guide to learn more about outline planning consent.
Approval of Reserved Matters
Upon receiving outline planning consent, the developer realises whether the planning environment is favourable for their project or not. If they so choose, they can invest further in drawing up detailed plans for approval. These details, termed earlier as ‘reserved matters’, need to be submitted to the LPA for approval within three years.
Approval of reserved matters, despite being a follow-up procedure to outline planning consent, is often treated as a standalone type of planning consent.
How to Apply for Planning Permission?
Applying for planning permission no longer remains a hassle to dread. LPAs in most locations in the UK use a centralised application reception system. Please visit this page to get started with your application for planning consent. Applying online not only saves you a great deal of time, it also lets you stay on top of the progress of your application. If you have already applied for planning permission, this page will help you track the status of your application.
If, for any reason, you are unable to submit a planning application online, you can post a paper application to your LPA.
Maintaining Requisite Documentation
It’s very common for applicants to provide inadequate, often incorrect, information while applying for planning permission. This often results into certain refusals. To keep your project from meeting this fate, it’s important that you append your application with adequate documentation.
- Location plan
- Site plan
- Design and Access Statement (not mandatory)
- Appropriate ownership certificate (A, B, C or D)
- Agricultural holdings certificate
- Other documentation as requested by the Local Planning Authority
The fee you will be required to pay will depend on the type of planning consent you are seeking, the location and the extent of works proposed.
To estimate the planning fee for your project, please visit this page.
How Long Does It Take?
Under regular circumstances, planning applications are decided upon by the LPAs within 8 weeks. This can, however, take longer if your application is incomplete, inaccurate or complex. You can contact your LPA to check the progress your planning application has made.
Important: What to Do When Your Planning Application is Refused?
It’s quite common for planning applications to meet conditional approval. Many applicants that receive conditional approval alter their plans in accordance with the conditions and reapply for planning permission. This, as many experienced developers and planners would say, is the most efficient way to deal with planning conditions.
If you wish to challenge the decision made by your LPA, you may submit an appeal to the Planning Directorate. This page details the course of action you need to take in such cases. Before you do that, however, please take note of the following:
- You can appeal against a planning refusal within six months of receiving the LPA decision.
- It’s always more productive to consult with the LPA the problems that led to the refusal. It is then possible to amend the plan accordingly and submit a new application free of charge. Many developers follow this route to great effect.
- Once you submit an appeal, the matter no longer remains with the LPA. Thus, your appeal may have to wait months in queue before it is heard.
Hassle-free Development Finance Built Around Your Exact Requirements
Obtaining planning permission, complicated as it may appear, only marks the beginning of a property development project. The next step, perhaps the most critical of them all, is to find funding for your project.
Approaching multiple lenders in your personal capacity is as inefficient as it is time consuming. The fact that lenders take longer to assess such application only makes things more difficult for developers. To keep your project from getting stalled before it even begins, it’s invaluable to have a renowned whole of market broker like Commercial Finance Network handle your Development Finance application.
Our team carefully assesses your application and sends it out to handpicked, specialist lenders across the UK. High approval rates mean that we usually manage to solicit multiple development loan offers that you can compare and select from.
Let your property development project get off the ground with the best suited funding. Get in touch with our Development Finance team today.