The Government has indicated that it will extend planning permissions which otherwise may have lapsed due to developers unable to commence their project due to the COVID-19 pandemic.
Normally when planning is granted the parties have 3 years to commence the project from the date that the consent is received. However, the government have now indicated that they will offer an extension to projects which have been disrupted by the lockdown.
Knight Frank partner and head of town planning, Stuart Baillie, said the time extension is “not very generous”. He added: “I would prefer to have seen greater flexibility with a full 12 months or even 24 months added to the expiry date of the original consent. Clearly the government is intent on pushing industry to deliver construction and in particular new homes but we are yet to understand the full economic impact of Covid-19 on businesses, market demand, labour supply, and construction costs, which is unlikely to be understood until we are well into 2021.”
Additionally, the government is preparing to introduce new measures to speed up the pace of planning appeals. The government plans to bring in new laws to permanently grant the Planning Inspectorate the ability to use more than one procedure – written representations, hearings and inquiries – at the same time when handling a planning appeal, allowing appeals to happen much faster.
Matt Lenzie from Commercial Mortgages Broker said: “this is a positive move by the government, although the extension period does seem a bit short. Knowing how long these transactions can take, this probably doesn’t make a huge amount of difference. From our conversations with builders and developers there is a huge amount of uncertainty regarding exit values and funding, therefore an extension of a couple of months probably doesn’t make that much difference. A 12 to 24 month extension would probably help more.”
Commercial Mortgages Broker offer a wide range of funding solutions for developers and investors, get in touch with our team today.