Rooftop Developments – Profit or a trap?

Whether you are taking the big step of buying or renting your first commercial property, purchasing a development site, adding to your buy to let portfolio or purchasing your new home, understanding Value Added Tax (VAT) is an essential part of the world of real estate.

You own the freehold to an apartment building in London, and you are approached by the developer with an interesting proposal. They want to buy the unused rooftop space on your building to develop and sell some new flats. Their pitch? We pay you 2 million pounds and we take on all the expense and risk of construction and the building.  Sounds great, right? But, what’s that nagging voice in your head saying “this is too good to be true”. 

Whilst the developer’s plan is part of a growing trend to build extra floor on top of existing buildings to create new homes (and lines up with the government’s goal to boost housing across the UK), there are a number of risks to consider and actions to implement before agreeing such a sale.

The process of buying a residential property in England can be more complicated than purchasing a property overseas. There are a number of key factors which differ from overseas systems and understanding these differences can help overseas buyers navigate the system and ensure they secure the property they choose. We have set out below the main complexities for buyers to consider:

The need for new houses is well-documented and inarguable.

The government have set an ambitious target to tackle this housing crisis – calling for 1.5 million new homes over the next five years or put differently, 300k new homes a year. To put that in context, UK house building has not topped 300k in a calendar year since 1970 – so, as I say, ambitious.

This Bill, which was originally introduced by the previous government as the Renters’ Reform Bill, seeks to level-up the perceived current imbalance between residential landlords and tenants by bestowing on tenants greater rights and security. But critics argue that the proposed reforms go too far in favour of tenants. So, what are the current key reforms affecting private residential tenancies?

The recent legal challenges faced by Pink Floyd legend David Gilmour over the ownership of his £10 million Hove mansion have cast a spotlight on the importance of clarifying property ownership, especially when held by now-defunct corporate entities. 

Introduced in 2013, permitted development rights led to an uptick in office-to-residential conversions and recent amendments made to The Town and Country Planning (General Permitted Development) (England) Order 2015 (‘GPDO’) have made office-to-residential conversions even more accessible for developers. This blog looks at the recent changes and discusses the opportunity these present to developers.

In the current property market, properties are selling for less and sales are taking longer to complete.  There are lots of tip available about attracting a buyer, but how do you convert a buyer's offer into a quick exchange?

The new Labour government is expected to announce significant tax increases in the upcoming October budget. This follows Chancellor Rachel Reeves' revelation of £22 billion in unfunded spending.

The new Labour government's decision to feature plans to ‘get Britain building again’ as one of its first announcements upon taking office highlights both the severity of the housing crisis it has inherited and the crucial role property development will play in its strategy to encourage investment and stimulate economic growth. Whether it is house building, onshore wind farms or data centres, early signs suggest that Labour will facilitate a raft of property-based activity that aims to provide a sustainable solution to the housing crisis, secure economic growth and (perhaps less importantly) keep Real Estate lawyers busy in the coming years.

Whilst the housebuilding side of Angela Rayner's new role of Secretary of State for Housing, Communities and Local Government has garnered headlines in the first week of the new Labour Government,  changes to section 117 of the Leasehold and Freehold Reform Act 2024, which are due to take effect on 24 July 2024, may bring the issue of cladding and building remediation costs to the top of her inbox sooner than she may have expected.

The Biodiversity Net Gain requires developers to improve the biodiversity of each habitat category on their development site by 10% above the pre-development biodiversity levels and to maintain this for at least 30 years. The Biodiversity Net Gain requires developers to improve the biodiversity of each habitat category on their development site by 10% above the pre-development biodiversity levels and to maintain this for at least 30 years. If developers cannot achieve the BNG through enhancing, creating, or restoring the habitat on their development site they can purchase off-site biodiversity units from land managers who will enhance, create, and restore the habitat on their land for at least 30 years. For more information on the biodiversity net gain, what biodiversity units and credits are and how they work, and what developers need to achieve see our previous article here.

The last general election seems a lifetime ago and after a turbulent few years, a global pandemic, an economic crash, three conservative prime ministers and an ageing lettuce, the 4 July 2024 election is upon us and forecasters predict that change is likely. Whilst topics such as the NHS and the economy have taken centre stage, there have been a number of property pledges and housing targets proposed across the parties. Here we seek to cut through the manifesto jargon and highlight the key themes of housing policies from the Labour Party, Conservative party, Liberal Democrats and the Green party.

For those buying, selling or carrying out improvement works on a prime residence, it can be very important to maintain privacy and confidentiality, particularly if you already have a public profile. Fortunately, there are a range of possible steps that can be taken.

The Leasehold and Freehold Reform Act (“the Act”) became law on 24 May 2024. The Act aims to enhance the rights and benefits for homeowners in England. There is, however, debate as to potency of the Act given the absence of the proposed ground rent cap (which had been discussed for some time) and the failure to ban forfeiture of long residential leases. 

As of February 2024, the Biodiversity Net Gain has been introduced to major developments and was also rolled out to include small developments in April 2024. Developers will have to not only preserve but also enhance the biodiversity of their developments by 10% above the pre-development levels, tools such as biodiversity units and credits can help developers achieve this.

As the 1954 Landlord & Tenant Act celebrates a milestone birthday, recent case law demonstrating the strength of Tenants’ security of tenure, has renewed calls to modernise the aging legislation.

Tax experts could have been forgiven for taking a sharp intake of breath when chancellor Jeremy Hunt announced that multiple dwellings relief (MDR), a staple of the residential stamp duty land tax (SDLT) world, was to be abolished.

The Immigration Act 2014 governs the ‘Right to Rent’ across the private sector in England.  All landlords have a responsibility to verify the immigration status of prospective tenants.  Failure to comply with the Right to Rent regulations can result in severe civil penalties imposed on landlords who are found to have tenants residing in their properties without the legal right to rent.

This blog was first published by PrimeResi on 12 March 2024.

In light of recent economic conditions, there have been an increasing number of high-end properties, in London and across the country, being sold by receivers. Properties being sold by receivers can pose an interesting opportunity for buyers as they are often sold at a competitive price and the receivers will want to deal with any sale quickly. But what are the risks of purchasing a property from a receiver and can they be alleviated in any way?