New guidance allows extending property upwards by up to two storeys
London’s famous skyline could soon grow even taller, thanks to new legislation on extending properties upwards. Extending properties upwards is an excellent way to increase profits on your property, although the initial expense of expansion is quite high. Our airspace conveyancing solicitors explain everything you need to know here.
What are the new rules on extending property upwards?
As of 1st August 2021, property owners can now extend their property by up to two additional storeys above their property without full planning permission, thanks to the new Permitted Development Right (PDR). This legislation hopes to encourage the building of hundreds of thousands of new homes by making use of otherwise unused airspace, especially in London.
What is airspace in property?
Airspace refers to the open air above a property, which is usually divided into a higher and lower stratum. In England and Wales, the upper stratum tends to be between 500 and 1000 feet from the top of a property, while the lower stratum is everything below this amount where someone else’s presence (for example, a low-flying aeroplane) could interfere with your rightful enjoyment of your property. Freeholders will typically own the lower stratum of airspace above their property, though this isn’t always the case.
Who owns the airspace above a property?
Generally speaking, the owner of the property’s freehold will usually also own the airspace above the property – however, this isn’t always the case, nor does it mean you can build without consent from your lessees. If a lease grants its leaseholders right of way onto the roof of their building, you will either need to uphold this right or remove their right of access by way of a deed of variation of lease. Additionally, your top-floor lessee may own the roof, depending on what is written in their lease. If this is the case, only they would have the right to extend their property upwards and you would need to speak to them about varying their lease. Even if your leaseholders don’t own the airspace above a property, they may be entitled to right of first refusal under the Landlord and Tenant Act 1987, meaning that you would have to offer to sell them the airspace before you can offer it to anyone else. If you do this and your tenants decline your offer, you cannot sell the airspace for a different price (or under different terms) than that which you offered to your lessees for at least 12 months following their refusal. Speak to our property solicitors to find out whether right of first refusal is necessary for your lessees. If you decide to sell your freehold at any point, your tenants may be entitled to right of first refusal under this act. If they are eligible, you will need to serve a Section 5 Notice on them – find out more in our blog post on selling your freehold with a Section 5 Notice.
How can I change my property’s leases to allow me to extend property upwards?
A deed of variation of lease allows you to change one of the terms in your property’s lease without having to create and assign an entirely new lease. The changes should be agreed upon between the freeholder and leaseholder, meaning that you may need to be prepared to compromise – your lessee will likely want something in exchange for losing right of way or ownership of the roof. Find out how to create a deed of variation of lease in our blog post.
Can I buy the airspace above another property?
Although currently uncommon in the UK, airspace is frequently bought and sold throughout Europe and the USA. With the new legislation, purchasing airspace is set to become more popular here in the UK – though unfortunately, this means it’s also likely to become more expensive. If you decide you do want to purchase or sell airspace, our knowledgeable airspace conveyancing solicitors can handle your transaction efficiently and effectively.
What can I build on top of my property?
Although the new legislation was created with building new homes in mind, it is possible to extend a commercial property upwards instead. However residential properties, especially in areas like London, are likely to attract a great many buyers – especially affordable housing options. Luxury apartments and penthouses are also popular with high net-worth individuals in central London, although they are also far more exclusive. As well as considering what is likely to be the best investment, you should also take into account what sort of tenant or business you would want above your property. Having a high-profile company above your residential flats may seem like a good idea until the noise of the business drives tenants away.
Which properties can I extend upwards?
Before bringing the builders in, it’s important to confirm with an architect that it’s even possible to extend your property upwards. Some older buildings would not physically withstand the weight of an airspace development. Plus, as most airspace developments are prefabricated (build in sections off-site then transported and installed onto the building) your property will need to be in an area where it is possible for a crane to access the building. You will also need to consider how you will ensure your airspace development has access to utilities. It may be possible to extend the existing services in the building to reach additional floors, or you may need to create additional facilities to ensure each floor has them. Remember to factor this into the total cost before extending property upwards.
Is there anything else I need to check before extending property upwards?
You may no longer need full planning permission, but you will still need to check that there are no restrictions in your tenants’ leases or restrictive covenants on the building preventing airspace development. Unless you’re planning on expanding your own home upwards, it will also likely be a good idea to assign leases to the extension, especially if you’re planning on creating new leasehold homes. Although a flat does not striclty need a lease in order to be sold or rented, the majority of mortgage lenders will not lend on a flat without a lease, thereby having a detrimental impact on the marketability of your new property. You can find out more about this in our blog on the title split of your property and creating new leases. Additionally, if you’re planning on extending property upwards to create new self-contained flats, you will likely need to split your property’s title. Read more about this in our blog on splitting property into flats.
How can I obtain funding for an airspace development?
This will depend largely on whether you already own the property and what you wish to use an airspace development for. A bridging loan could be sufficient if you already own the property you wish to extend and are planning on selling the newly-created space – you could use a bridging loan to fund the construction, then pay back the loan with the profits from the sale. Read our blog to find out more about bridging loans and how our bridging loan solicitors could help you secure funding for your airspace development. You could also seek a commercial mortgage if you are hoping to purchase a commercial building for airspace development. Our sister company Starck Uberoi Wealth can provide independent mortgage advise tailored to you; speak to them for advise on commercial mortgages.
How Starck Uberoi Solicitors can help
Extending property upwards is set to become a popular form of expansion as developers compete for space; our airspace conveyancing solicitors can help you get there first. Our fast conveyancing services will ensure your transaction is completed in an efficient manner, with easy communication and real-time updates through the Starck Uberoi App. We have Law Society Accreditation under the Conveyancing Quality Scheme (CQS) and a reputation for handling conveyancing matters quickly and reliably. For more information, please see the Conveyancing page on our website. To book an appointment with our airspace conveyancing solicitors, please call 020 8840 6640 or email solicitor@starckuberoi.co.uk. Our offices are located in Ealing, Brentford, London Belgravia and Canterbury, all within easy reach by public transport. Our partner, Raminder Uberoi, can also provide a Notary Public Service at any of our London offices.
