Keep up to date with the latest Stags news

Changing times: The emerging new home market

Changing times: The emerging new home market

Simon Forman, Associate Partner and Barnstaple Branch Manager, discusses how Class Q planning is changing the new homes market.

We are told that not enough new homes are being built to satisfy the demand; the latest Government policy is apparently to loosen planning ‘red tape’ in order to quicken up the process.

In the meantime, building land has become scarcer, which is hardly surprising as “they are not making any more land,” as the saying goes.

As a result of this shortage, perfectly sound properties, sitting in large plots, are being sacrificed in order to make better use of the land in question.

This scenario has been relevant for decades and the property world rarely experiences developing areas of business, however, there is a very significant change quietly going on in the background.

This revolves around the Class Q planning regime, allowing permitted development for the conversion of former agricultural buildings. There are a number of important criteria to satisfy the usual planning requirements and, in particular, the development must constitute a conversion not a new-build; therefore, the structure and a good proportion of the external materials needs to be capable of retention and re-use. The legislation also dictates that the structure in question should be converted within a three-year period from the grant of the consent.

Since this regime was introduced, thousands of qualifying buildings across the UK have been converted. This is a very sensible policy because it fairly spreads the load of ‘new homes’ across generally rural communities and replaces what were mainly neglected eyesores with innovative homes, most of which are in idyllic locations and even some in Areas of Outstanding Natural Beauty. In economic terms, this policy has created work for builders, electricians, plumbers, roofers, kitchen fitters, general building suppliers, landscapers, utility companies, architects, solicitors, land agents and estate agents. Furthermore, the extra stream of Council Tax is likely to be significant. These distinctive homes are also introducing new life to rural communities and injecting disposable income into local economies.

Since being initially introduced, there is some evidence that the Class Q regime has moved forward and that, for example, once Class Q consent has been obtained and the principle of planning achieved, some owners have moved to standard planning in order to benefit from less restricted rules and more generous timescales. There are even a number of cases which have moved from Class Q, where the structure is converted, to standard planning, where the structure is replaced or even re-sited.

As these opportunities have improved, the values of many barns have increased considerably, so much so, that they are difficult to value too precisely and often sell above their guides. Value often relates to the standard of existing construction and the consequential cost of conversion, as well as usual considerations such as position, proximity of neighbours, views and distance and cost to connect services etc. In remote cases, ‘off grid’ is an option, which has become more popular as energy prices have rocketed.

A major factor determining value is that individual units tend to appeal to private buyers wanting to ‘stamp their mark’ and create a bespoke dream home. They are mainly interested in acquisition cost plus development cost, whereas developers are looking for a healthy profit margin and, therefore, are often outbid by the private buyer.

The likelihood of obtaining consent for agricultural buildings seems to be increasing, even in circumstances that might have seemed unlikely a few years ago, such as for a corrugate sheet clad barn.

Therefore, the scene appears to be set for many more of these buildings to be re-purposed and taken to another level by buyers’ imaginations.

For further information or advice please contact your local Stags office here