Developers no longer getting tanked up

Commercial Property | 21st June 2018

The UK population has grown by over eight million since 2000.

The demand for housing has risen accordingly and housing developers find themselves constantly challenged to find new sites to build on.

For many developers an existing site in the middle of an urban area with a change of use is a far more attractive prospect than developing a greenfield site from scratch, which will of necessity require the construction of new roads, drains and sewers.

A large scale developer, constructing a new estate of a hundred plus dwellings will expect to have to put in the infrastructure and make the necessary contributions for any or all (depending on which local planning authority they fall under) of highways, transport improvements, community recreation facilities, education, health and affordable housing.

For a smaller scale developer, one who is building anything between one and ten dwellings all these expenses may well have an adverse effect on the profit margin. The smaller schemes will not achieve the same economies of scale as their larger counterparts. Potentially these costs can be avoided by recycling an existing site. But where to look for such a site?

In the last decade both petrol stations and pubs have been prime target sites for redevelopment, (once the local planning authority has been convinced that there is no demand for the asset under its existing use).  Inevitably both will have good road links and existing sewers and drains but they each come with their own set of challenges. The main challenge with petrol stations is the necessary remediation work for fuel storage tanks. With pubs, not only is there a high chance the building will be listed (which increases the costs of any conversion and can inhibit development) but also, following the introduction of the 2011 Localism Act, pubs are increasingly being earmarked as Assets of Community Value,  neutralising their potential as development sites.

Developers seldom sit still and there is an increasing drive to use former nursing homes as potential scheme sites. The number of registered care homes has dropped by approximately one twelfth in the last five years – a drop which mirrors the drop in trading petrol station and pub numbers approximately ten years ago.

And what of the future once the majority of the former nursing homes have been redeveloped? Garden nurseries with their location, plot size and lack of fuel tanks could be a  good prospect for change of use.

This is not legal advice; it is intended to provide information of general interest about current legal issues.

John Guthrie

Senior Solicitor, Commercial Property

John started his career at Hart Brown in 2016. He is a Commercial Property solicitor with 18 years post qualification experience in property. He i...