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Keep Up! The new laws coming into force
In a year which has already seen some of the most radical changes to the planning system in a generation, from August 1 new Class MA (‘mercantile to abode’) legislation comes into force, replacing the previous regime of office and retail permitted development to residential uses (Class M).
What are the headlines?
Subject to certain conditions the new laws allow the change of use from business category E to residential.
What is Business Category E?
Former use A1 (retail shops), A2 (financial and professional services) A3 (restaurant), B1 ( business), D1(a) (non-residential institution) D1 (b) (creches, nurseries etc), D2(e) (assembly and leisure).
This means that properties which formerly fell under classes A3, D1(a), D1(b), and D2(e) will now benefit from permitted development rights which they did not do before
Certain Conditions – what are they?
The rights do not apply to buildings where more than 1500 sq metres are to be converted. This is ten times more for retail to residential than currently permissible (Under Class M) but is a restriction on current office to residential conversions.
Properties must have been in Class E use for at least two years continuously prior to any application and also vacant for at least three months. Closure due to Covid does not meet this qualification where the property continues to be occupied by the tenant.
There are also other restrictions including those regarding Areas of Outstanding National Beauty, Sites of Special Scientific Interest or World Heritage Sites – or safety hazard areas or military training areas!
What about Conservation Areas?
Unlike the previous regime, the new PDR applies in Conservation Areas. There will however need to give consideration to the impact on the ‘character and sustainability’ of the area in the prior approval process.
Are there any other Prior Approval matters to consider?
Most of these continue to be the same as under the current guidelines – transport and highways, contamination, flood risk, and the provision of adequate natural light to habitable rooms. There will also be consideration given to loss of certain local infrastructure and agent of change (e.g. effect of change of use to existing neighbouring businesses).
There will also be requirements to meet space standards for the created homes – none less than 37 sq. metres.
As with all new legislation it will take a while to see how these changes will be received, and for the detail to be fully explored. But combined with the recent changes to the Use Class order this will undoubtedly herald a radical change to the High Street.
If you would like to discuss this or explore how this may impact upon your property please contact Edward Dent (email@example.com).
For full details on the legislation please visit the Government website – click here.22 April 2021
Meet the team: Tom Mitchell
This month we’re talking to Tom, Senior Property Manager. Discussing his role, the challenges and where he sees the future of property management.
1. Congratulations on being promoted to Senior Property Manager, how does it feel?
I’m really chuffed, career progression was one of the reasons why I joined Hindwoods in first place as I wanted to further my career and with this promotion I’ve achieved that, it also shows that board of Directors trust and believe in me.
2. So, what makes a successful Property Manager and what do you do day to day?
A successful Property Manager needs to be willing to learn, we deal with so many different issues day to day that we always need to be willing to learn and pick up new ideas and skills, one day you might be dealing with a roofing issue and the next day a plumbing issue, the next a fencing issue, having knowledge of each job and trade is invaluable as a Property Manager. Successful Property Managers also have to be resilient, patient, be a good listener and communicator, honest and trustworthy and work well within a team. My day to day work generally consists of dealing with leaseholders emails and phone calls and actioning the various different queries that they have and liaising with various different contractors with regard to works required on my portfolio.
3. What is your favourite thing about being a Property Manager?
No two days are the same so it is never boring, some of the issues that come up are very challenging and when they have been resolved because of the decisions I have made, it gives me a good sense of achievement.
4. What are the most challenging parts of being a property Manager?
Managing residents expectations and keeping up to date with the ever changing laws and policies of leasehold management.
5. How has Covid-19 affected your work?
I’ve been lucky enough to have been able to have worked throughout the whole pandemic, from home. During lockdown 1 it was very difficult getting contractors out to some of the simplest jobs mainly because they had closed, or the materials were not available, which was not ideal.
6. Where do you see the future of Property Management?
Its forever changing, the laws, health and safety, fire safety, all of which has been going through a lot of changes over the years and will continue to do so. We are heading towards a lot of changes, that if passed through parliament will see us as Property Managers having to be licensed but also companies doing property management will have to be registered and there is also talk of managed properties having a dedicated health and safety officer albeit this is in the very early stages but I do see Property Management as a strong industry that will be around for many, many more years to come.21 April 2021
Meet the team: Jacob Capewell
This month we’re talking to Jacob Capewell, Chartered Surveyor. Discussing lease advisory, valuations and how Covid and technology has impacted his role.
Q1. So what does ‘professional work’ mean?
It covers a range of services we supply including rent reviews, lease extensions and renewals and enfranchisement (for both landlord and tenant) and valuations. As Chartered Surveyors, particularly RICS Registered Valuers like myself are required to produce high quality work in accordance with strict professional standards set by the RICS – so it’s fair to say that we are subject to much greater scrutiny and are more accountable in our work than general advisers. ‘Red Book’ valuations need to be undertaken by a chartered surveyor.
Q2. What is a ‘Red Book Valuation’?
In essence it’s written advice in accordance with guidelines set by the RICS; Red Book valuations are formal and can only be undertaken by RICS Registered Valuers and not by estate agents – marketing reports do not constitute formal valuation advice and cannot be relied upon for HMRC tax returns such as Inheritance Tax, Capital Gains etc
Hindwoods provide Red Book valuations across all property sectors for a variety of purposes including: –
• Pension fund purposes (Self Invested Payment Plans)
• Tax (Capital Gains Tax / Inheritance Tax)
• Secured lending (Mortgages)
• Residential Lease Extensions (leasehold reform/enfranchisement)
• Sale and Purchase (off market transactions)
Q3. Which part of you work has Covid made most difficult?
Unsurprisingly, a lack of transactions in some of the markets has made evidence gathering more difficult than ever – this was made harder with the introduction of the furlough scheme because agents who I would normally speak with to verify deals and chat through local trends with suddenly were not available which was frustrating.
Q4. Which if any part of your job has technology made easier?
I love the iPad – it’s a game changer. I use an app called sketch pad which allows me to draw floor plans much easier than pen and paper – it also allows me to erase any lines that have gone a bit awry.
You can also upload pictures and existing floor plans/lease plans and draw measurements straight onto those which is helpful – once you’re done there is an export option to Outlook so your site notes are already in the office waiting for you when you get back.
Q5. Which parts of your job do you think technology may ultimately replace if any?
Tech has already replaced some of the manual work involved for example with the use of automated calculation software such as Argus. However, there is a subjective element in valuation meaning that inspections are almost always going to be necessary in order to really understand the property – be that its condition, layout, location etc. And as each property is unique, experience and local knowledge mean we are a way off replacing the human factor just yet.
To find out more about the professional services Hindwoods offer contact:
firstname.lastname@example.org March 2021
‘Going once, going twice…’
47 Old Woolwich Road was home to Greenwich Auctions for 20 years and attracted both locals and visitors alike. The property is therefore steeped in history and ripe for opportunity and even featured on BBC’s ‘Antique Road Trip’.
The landlord is now welcoming bids from commercial tenants to let the premises on a new lease and is undertaking a comprehensive refurbishment of the space. The building offers a wealth of exciting possibilities under use class E, from gym to commercial kitchen occupiers. Neighbours include Paul Rhodes bakery – a local favourite, a kitchen company and a nursery.
For further details contact G.Mason@Hindwoods.co.uk
Register your interest with us now before it’s ‘…gone!’23 March 2021
Lordship Lane – A typical high street?
Even before the onset of Covid 19 most retail areas were ailing, and some in terminal decline.
The change of consumer patterns towards online shopping, combined with high rents and high rates had already led to the collapse of both large chains and independents alike.
Lordship Lane is not immune from this, with fashion retailer Irma having ceased trading and local traders being pushed to the margins.
However, the affluent local population, combined with many people working from home, has meant that there has been a mini boom for food retailers and take away businesses. Speciality cheese shop Mons has an almost constant queue outside as does the excellent fish shop Moxons. And of course there is local favourite William Rose butchers, upmarket gift shop & parfumier Roullier White and numerous other eclectic retailers added to the mix.
In addition, we have let premises during the last year to new businesses whose models seem resilient to the current challenges. Hip pizza operation Yardsale have opened up and are trading strongly. Vegan café Arapina are currently fitting out and will be opening soon.
The lockdown seems to have reminded local residents (and those further afield) of the excellent products available on their doorsteps, and the pleasure of walking and shopping from home rather than waiting for another brown box on the doorstep.
The lesson seems to be that if the offer is the right one for the area then people are willing to vote with their feet and support local businesses and their local high street.16 February 2021
GROUND RENT INVESTORS BEWARE!
The value of your investment can go down as well as up. So says your IFA but he is usually talking about your stocks and shares. It now looks increasingly likely this warning should be applied to ground rent investments.
In early January, Robert Jenrick, Housing Secretary, announced the Government’s Leasehold Reforms which they intend to push through within this Parliament.
Aside from reintroducing Commonhold, in very simple terms the old rules will be thrown out of the window and new ones will apply, we assume, to both new leases and existing.
Up to now, lessees could extend their lease by ninety years with the ground rent reducing to a peppercorn. The 1993 legislation, with subsequent amendment, required a calculation involving essentially three stages:
- The capitalised ground rent.
- The deferred value of the property.
- Marriage value.
Going forwards the Government has expressed its intention to extend the new lease to nine hundred and ninety years and marriage value will be a thing of the past.
Whilst this will bring protection and no small sense of relief to many, many thousands of lessees it may put a considerable dent in the value of investor’s portfolios.
Put simply, if the lease has in excess of eighty years the impact will not be huge. However in the light of recent Upper Tribunal decisions, quantum of marriage value for leases below eighty years has increased quite significantly and investors can expect that around 50% of the premium they could previously anticipate will disappear at the stroke of a royal assent.
What was hitherto regarded as a secure investment – all other things being equal, as the lease length reduces, the premium rises – will be dealt a significant blow where it hurts.
When this will come into being is as yet unknown, but lessees can sniff a change in the wind and we are already aware of some putting lease extensions on hold in anticipation of a considerable saving.
If you are interested in finding out more about how this proposed legislation may affect you please contact email@example.com
Meet our board company: Xpress Signs
We have used Xpress Signs for several years and have interviewed Piers the Director for this months’ newsletter. We ask them about challenges they have faced, how they have adapted to COVID-19 and what their predictions are for the property market in general.
• How long have you been in the erection business?
Xpress Signs have been printing and installing signage since 1998
• How many boards do you think you have put up?
I only have records dating back to April 2008, since then we have completed 994,521 board orders, so if we were to go back to 1998, well in excess of 1 million!
• What is a typical day for you?
The printers and sign fitters get into the warehouse between 6 – 7am. The fitters split all orders between them and the printers ensure all the signs are ready to go out. It is all a bit hectic until the fitters leave at around 8.30am. Then it is back into the office to deal with emails and calls. Site visits generally take place between mid-morning and mid-afternoon. The office closes at 5pm and we are usually out of the door by 6pm.
• How has ‘tech’ impacted on your business?
With regards to printing, the advent of wide format digital printing has made a huge difference. We can now print a 20m banner or produce a 20m hoarding the same day as we receive our artwork. Six years ago we Integrated our online board ordering system with google maps. This allows the fitters to see exactly where they need to go.
• Is it just boards or do you offer other services?
We offer a range of wide format printing for many industries. Producing hoardings, banners, exhibition signage & shop signs to name but a few.
• What is the strangest / most difficult job you have been asked to do?
We recently had to produce and fit a 28m by 9m banner in the form of a building wrap in Balham – not strange, but technically it was one of the harder jobs we have completed.
• How has COVID affected your business?
The fitters mostly drive vans on their own, so socially distancing has not been a problem. Mask wearing and hand sanitising is naturally mandatory in and around the office and warehouse. We have implemented staggered start times to reduce the number of staff simultaneously at work and the fitters often take two days work with them in order to reduce trips to the warehouse. 2020 was a tough year for many businesses and ours was no exception. Our clients are generally quite bullish about 2021, which fills us with confidence for the next 12 months.
• You have been in the property business for longer than most – what are your predictions for this year?
It’s a fool’s errand to predict any market and property is no different. Residential appears to have forged ahead while the stamp duty exemption has been in place, once this is over, I wouldn’t be surprised to see prices ease back a little. With interest rates to remain at historic lows for years to come, I don’t think we will see any dramatic drops in asking prices. For Commercial property, I expect warehousing to fare better than retail. The Coronavirus restrictions have pushed more people online and I think the High Street will struggle to regain some of its appeal. With internet purchases becoming easier all the time, these companies will require more warehousing pushing up demand for the limited supply.21 January 2021
A Green Light for Autonomous Vehicles at the Royal Arsenal
When the company behind managed trials for autonomous vehicles needed to find new premises, Hindwoods were pleased to work closely with the client to secure a solution which met their brief.
The Royal Arsenal site at Woolwich was identified as a favourite location early in the process due to the excellent public transport links already in place together with the forthcoming benefits of the Elizabeth line.
The Mini Car Showroom on Victory Parade was eminently suitable with vehicle access and parking, though it was clear that securing the property on terms which met the requirements of all parties was far from certain.
Hindwoods liaised with the freeholders, Berkeley Homes, to ensure that a high-quality facility commensurate with their objectives for the wider development would be provided. Alongside negotiations with the tenant this led to consent for a lease of the premises upon the most competitive terms available.
Smart Mobility Living Lab London (SMLL) have been operating from the site since Autumn last year, successfully testing vehicles and technology for carefully managed trials on public roads in the Royal Borough of Greenwich, as well as the Queen Elizabeth Olympic Park.
Is working from home working for you?
A recent sale of a Live/Work unit in Greenwich is indicative of the world we are now living in. We look at working from home and how it has impacted the property market.
With government guidelines stating in the most recent lockdown that if an employee can carry out their normal duties from home they should do so, we have seen an increased number of people working from home. This was particularly evident in the first working week of the new year and few expect office workers to return to the office full time in the near future. Flexible, hybrid working, where staff split their time between their office, home or other location, is expected to double following the pandemic, according to research.
Georgia Mason from our commercial agency team has recently sold a Live/Work unit in Greenwich on behalf of Peabody Developments to an applicant with a small accounting firm. This is a concept whereby a flat and a commercial space can coincide within one unit providing a space that is perfect for combining an inspirational working environment and a relaxing home life. This sale is perhaps a reflection of an increased movement towards home-working. Whether for owner occupation or investment purposes, it certainly seems like a sensible buy considering the political, social and environmental issues we are currently facing.
We have one Live/Work unit for sale remaining. For details on this please click here.