What to look out for when tackling a partially developed site

With the ever increasing costs of materials, competition for sites, lack of supply of labour and environmental considerations, the development world is diving yet further into uncertain times.

Never before has it been so difficult to find a site and follow it through development to sale of the units.

Because of this, more sites are stagnating and being sold unfinished.

Here are some points to consider when acquiring a part implemented scheme:

Title

Although it is likely that full due diligence would have been carried out by the previous purchaser you cannot rely on them having done it correctly and it would be wise to seek confirmation that nothing further has arisen and no changes have occurred since the land was originally purchased.

Planning

It is important for the incoming purchaser to check all things planning to ensure all applicable discharge consents have been obtained, that what has been implemented to date has been done so in accordance with the permission granted and any planning agreement entered into. In addition, if changes to the scheme are envisaged care needs to be taken when considering any planning changes so as not to render the original permission incapable of continued implementation.

Careful consideration also needs to be given to any copyright licences and letters of reliance provided to ensure they can be utilised by the incoming developer.

Biodiversity Net Gain

Biodiversity Net Gain is a relatively new issue, the Environment Act was only passed into law in November 2021. The Act outlines many policies, one of which is biodiversity net gain. The policy ensures that projects must, where the local authority dictates, create a scheme which minimises, mitigates or compensates for any environmental harm to produce a net gain in biodiversity. Developers should take care to ensure that any planning changes to a scheme do not trigger a BNG requirement. BNG will become law from November 2023.

Searches and Climate Change

Depending on the age of the searches and when the land was originally purchased it may be prudent to update the searches in particular to take account new reports relating to climate change that need to be considered.

Levelling Up

A new levy will see developers pay a fairer share for affordable housing and local infrastructure such as roads, schools and GP surgeries the government has announced today (17 March 2023).

The infrastructure levy, which will replace section 106 contributions for most developments, will prevent developers from negotiating down the amount they contribute to the community when they bring forward new projects.
Under the proposals, the amount developers will have to pay will be calculated once a project is complete, instead of at the stage the site is given planning permission. This will make sure that councils benefit from increases in land value, which can be significant for large developments that take years to complete.

This is just a handful of the issues that will need to be considered on the acquisition and onward development of a partially implemented site. We would be happy to discuss any other constraints and issues with you on a case by case basis.

If you have any questions about this topic, please do get in touch info@ts-p.co.uk.