Comment
Urban living: Building a Plan B into planning permissions
Current events have brought questions around how and where people want to live into sharp focus. These are perhaps most prevalent within the urban living market, with shifting attitudes and peaks and troughs in underlying demand highlighting the importance of building flexibility into the planning and design process.
Dynamic and diverse housing markets operate within many of our town and city centres, with an increasing number of developments across different sectors held in single ownership through institutional funding. These range from Purpose Built Student Accommodation (PBSA) through to co- and micro-living products, and conventional Build-to-Rent stock. Retaining a long term interest in a whole development incentivises developers and investors to ensure their schemes are fully utilised and occupancy levels remain high in the context of market evolution.
Against this backdrop, there is an increasing focus on managing market risk through the planning and design process. This is particularly relevant in the most competitive and emerging markets where the perceived risk of reduced or changing demand may be higher. What if the market is not as strong as we believe or rapidly changes direction? In this context, it is wise for developers and investors to build a Plan B into the design of their schemes, and secure planning permissions which provide flexibility in this regard. Designing schemes in such a way that they can be readily switched to alternative residential use – co-living to conventional residential for example - makes commercial sense. Indeed, Local Authorities are also increasingly alive to this risk. They don’t want empty buildings in their towns and cities and are often requesting, through Local Plan policies, that developers demonstrate how schemes can be easily adapted to other forms of residential development to help mitigate risk in the context of untested or evolving markets.
The structural changes to our lives brought about by COVID-19 further highlight the importance of this. For example, the increased prospect of empty PBSA bedrooms in the short term is forcing operators to look at their stock and consider how they put this to alternative use so it doesn’t lay idle delivering no commercial return. This may be through temporary changes of use to apart-hotels or serviced accommodation. In many cases this can be achieved retrospectively through the planning process – and we are advising on a number of such cases across the core cities - but this will be harder to do if schemes aren’t designed from the outset with this flexibility in mind. This is something which the PBSA market is alive to already, given the pre-existing issue of beds lying empty during vacation periods. Other sectors of the urban living market need to follow this lead.
We have witnessed the rapid advancement of the urban living market in recent years and we are proud to be acting on a number of ground breaking schemes across the UK. New residential models bring huge opportunities and represent a positive response from the market in adapting products to how people want to live their lives and where their priorities lie. These models of living are highly in-tune with lifestyle, and in turn developments need to be equally nimble in how they evolve in response to change and market shifts. It is important to get the form and structure of planning permissions right in order to achieve this. In certain circumstances, it may be possible to secure a permission which allows units to be switched between different types of residential uses without the need for a separate consent. Where this is not the case, retrospective changes to permissions may be capable of being made through amendments to conditions, variations to Section 106 Agreements or change of use applications.
One thing this year has taught us all is that circumstances can change quickly. Building in flexibility to the design and planning for new urban living is more of a critical consideration than ever before.
For more information on how we can support your urban living scheme, please contact Andrew Bickerdike.
12 October 2020