Upcoming evolutionary changes to the real estate landscape

A significant change in planning control has come into play that will impact transactional due diligence, comment Kirsty Tinsley Fenney and Christopher Stanwell of Fieldfisher.

The planning enforcement period for all breaches of planning control has been extended to 10 years. The four-year rule for breaches has been abolished and no longer applies from 25 April 2024. Developers intending to apply for a certificate of lawfulness of existing use or development based on a four-year period should consider making the application now before these changes come into effect.

This change comes from the ‘The Levelling-up and Regeneration Act’ passed by Parliament late last year. The Act aims to “speed up the planning system, hold developers to account, cut bureaucracy, and encourage more councils to put in place plans to enable the building of new homes”.

Other changes because of the Act have not come into effect straight away. They require secondary legislation, changes to national policy, and further consultation. However, the Act does provide a framework for a raft of future changes to the planning system with the intention of supporting the regeneration of left-behind places. If the Act, when applied in practice, results in “more homes, revitalised high streets and town centres…”, it will be interesting to see the effect this has on the North West, our city centre here in Manchester and nearby towns in Greater Manchester.

What could some of the main changes look like?

1. Power to vary planning permission

A new statutory variation mechanism allowing for planning permissions to be materially amended is being introduced – Section 73B. This will allow for more material (but not substantial) changes to be made to planning permissions, providing there is an existing permission (which is not a Section 73 planning permission), and the proposed variations are not “substantially different from that of the existing permission”.

2. National Development Management Policy (NDMPs)

The introduction of NDMPs will form a national statutory policy standard, against which applications for planning permission will be determined. NDMPs will have a higher status than local plans and will deal with issues such as heritage, Green Belt, and climate change.

The Act introduces an even greater presumption against development that is not in accordance with statutory policy (NDMPs) and local plans. There must be material considerations which strongly indicate why the proposed development will not be in accordance with these. Also, if there is any conflict between a development plan and a NDMP, the conflict must be resolved in favour of the NDMP. The long-established statutory primacy of the development plan is therefore eroded.

3. Commencement notices and other reports

There will be an obligatory requirement for developers to serve a commencement notice before development begins pursuant to planning permission. Failure to serve will be a criminal offence liable on summary conviction to a fine. This will be extremely helpful if you are acquiring a property in transactional due diligence.

4. Power to refuse to determine applications

Local Planning Authorities will be able to refuse to determine an application for planning permission if the developer has either a history of not implementing planning permissions in that local area or a track record for building out their developments unreasonably slowly.

5. Environmental Assessment Regime

Environmental Impact Assessments and Strategic Environmental Assessments will be replaced by ‘Environmental Outcome Reports’, which is aimed at simplifying the environmental assessment process.

6. New Infrastructure Levy set to replace CIL

Local Planning Authorities will be mandated to issue an Infrastructure Levy (IL) charging schedule, rather than having discretion to do so as is currently the case with Community Infrastructure Levy (CIL). The IL would be based on gross development value rather than the floor space.

IL is intended to fund affordable housing as well as other local infrastructure and should reduce the circumstances in which a Section 106 agreement is required.

While the planning enforcement period is already in effect, the implementation of these additional changes hinges on various factors, notably the political landscape, including the anticipated new government this year and its priorities.

If you have any questions about what the Act may mean for you, please contact us at Fieldfisher; we can assist with all planning and real estate related enquiries.

• Christopher Stanwell is planning partner at Fieldfisher

Christopher is a leading advisor in planning law for both the private and public sectors and leads the Planning and Environment team at Fieldfisher. Contact: Christopher.Stanwell@fieldfisher.com

• Kirsty Tinsley Fenney is real estate partner at Fieldfisher

Kirsty is a real estate lawyer with over 20 years of experience advising local market, national and international clients of real estate transactions with extensive experience in high-value investment acquisitions and disposals, asset management of client portfolios and development. Contact: Kirsty.tinsleyfenney@fieldfisher.com