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Budget Update - Commercial Property
This is an update to our previous article of 22 March 2011 in which we indicated that the government may be announcing changes to planning rules for converting existing commercial property into residential. We observed that 'the devil will be in the detail' but now the budget has been announced it sadly appears that on this issue, there isn't much detail.
Instead of announcing a decision on the issue the budget states "the Government will consult on proposals to make it easier to convert commercial premises to residential." If agreed, this proposal will allow changes of use, without the need to apply for planning permission, to class C3 (which is residential) from class B1 (which is business), B2 (which is general industrial) or B8 (which is storage/distribution). We will have to wait and see the outcome of this consultation in due course.
Other benefits to developers can be seen in the attempt to streamline the planning process. New proposals include:
• A new presumption in favour of sustainable development, so that the default answer to development is 'yes' to applications which comply with up to date planning policy.
• A 12 month guarantee for the processing of all planning applications, including any appeals.
• Ensure a fast-track planning process for major infrastructure applications through the Major Infrastructure Planning System.
Property investors also had a boost through changes to Stamp Duty Land Tax ('SDLT') rules for bulk purchases. Under the current rules, where a purchaser buys multiple properties from the same seller, he pays SDLT on the total consideration given for the land. When the Finance Act 2011 gains Royal Assent a purchaser can choose to pay SDLT on the average value of the properties purchased (subject to a minimum rate of 1%) rather than on total price, which could result in a substantial saving.
For more information on any of the above topics please contact the commercial property team at Hughes Paddison.