Building or Developing on Contaminated Land

There is a (reasonably) well known quote by Mark Twain that goes:

“Buy land! They’re not making it anymore”

Personally, I quite like this, as it is a very succinct way of reminding people of the relative scarcity and finite nature of land.

What this means to the novice property developer and investor is that theoretically, at some point all land could be bought and developed upon. Of course, this is never likely to happen but what is foreseeable is a point where all available land has become so sought after that the asking price has been driven up to a level where it renders a project financially unviable.

In this situation, brownfield sites (sites that have developed previously and are currently available for a new use; possibly subject to a grant of planning permission) might have to be considered. Sometimes, these plots will have been used for activities that would render them contaminated (for example, a filling station). When novice developers think about a contaminated site, they might visualise being ankle-deep in oil or waste fuel while the building work is carried out. The reality is that this could never be the case.

The control of contaminated areas of land is governed by either the planning process as a whole, or Part IIA of The Environmental Protection Act 1990 (EPA 1990). Under Planning Policy Statement 23, a property developer is responsible for making sure the development is safe for its intended use. So if the site is suspected or there is proof of it being contaminated, the planning authority will require assessments to be carried out before any planning consent is granted.

Under EPA 1990 Pt IIA, if the site is not dealt with through the planning process, then a local authority has an obligation to investigate any potentially contaminated land within its boundaries. If any contamination is found, then the developer must carry out a clean-up if the contamination is considered a risk to people, property or the environment. Clean up of an area will include some or all of the following:

1. ‘Desktop study’, site visit and initial risk assessment. This will entail an appreciation of the site history; original, current and future/proposed use; information on expected contaminants and their sources; information on potential ‘receptors’ such as people and flora/fauna. When Phase 1 has been completed, a report containing a preliminary risk assessment and recommendations for further investigative work will be submitted to the local authority and the Environmental Agency prior to moving on to Phase 2.

2. Site investigation and risk assessment. This phase involves the investigation into the scale of the contamination. This could be heavy metals, oil and fuels or gas. A ‘Sampling Strategy’ will be drawn up to specify the depth, scope, pattern and frequency of sampling. An assessment of risk to human health, waterways and other receptors will also be carried out at this stage. Upon completion, a report will have to be submitted to the local authority and The Environmental Agency detailing the recommendation as to whether remedial action is required to make the ground fit for use.

3. Remediation approach and works. The approach to be adopted for remediation will include the intended standard to be achieved. The works is when the physical work is actually carried out to make the site fit for development. It might include the removal of contaminated soil from the site and/or the introduction of a layer of impermeable material to prevent contamination seeping through. Any potential source of contamination will also be remedied to prevent further contamination.

4. Validation of remedial works. This is when the ground will be re-sampled to establish how effective the works have been. A Remedial Works and Supporting Validation Report must be submitted to the local authority and the Environment Agency. If it has been successful, then a written decision will be issued and the usual application for planning consent can be submitted.
Clearly, this is not a particularly speedy process. And it is also unlikely to be particularly cheap. However, there are specialist companies who will look after the process for you. Assessing the cost involved is a difficult thing to do because it depends entirely upon the scope and nature of the contamination, the size and location of the site and the intended eventual use of the site.
A very approximate indication of prices however is:
Removal of contaminated material – £50-£170 per cubic metre.
On-site encapsulation – £40-£100 per cubic metre.
Soil washing £60-£120 per tonne.

Items that might have to be included in the above are:

Haulage costs.
Landfill tax
Accommodation of personnel (if required)
Traffic management

The best recommendation I can provide if you are considering developing on a site you suspect to be contaminated, is to speak to one of the specialist companies (links provided below). They are fairly unlikely to be able to give you a very accurate quote for clean-up, but should be able to give you some idea of approximate costs. An appraisal could then be carried out to see if the project is financially viable.

Building on a contaminated site might financially benefit you, as many other developers might be unwilling to use the land, even post clear-up. Subsequently, if you considered this a worthwhile idea, the land cost might prove to be substantially cheaper than the alternatives even after inclusion of the cost of clean-up.

Links:
Environmental Agency page on Contaminated Land
http://www.environment-agency.gov.uk/research/planning/33710.aspx

Land Remediation Specialists:
http://www.trm-ltd.com/

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Developing a Victorian Property

As I’ve mentioned before, it’s never an easy ride developing a property for profit. Developing a listed property is more difficult still and not to be recommended for the novice developer. That said, it’s almost always period properties that manage to keep their romantic appeal over the more modern ones.

The vast majority of period property purchasers are pleasantly surprised to find that period features have been retained and enhanced. It can be quite disappointing for viewers to a period property to discover that the interior has been cleared of features and looks like a new-build. Therefore, it’s important to remember that if a property is a period one, you must keep the internal and external features.

Victorian properties are probably the most common of all listed properties. This is because the Victorian era covered many years. It took over from the Georgian period and began in approximately 1840 and lasted until around 1900. It’s fairly easy to notice the crossover period between Georgian and Victorian, unsurprisingly Georgian architectural features blended gradually into Victorian. A specific feature of typical Georgian architecture is symmetrical and proportional windows of many small panes, where the height of the windows is exactly double that of the width. Victorian properties however have very tall and narrow windows of only one or two panes. Technology had moved on to facilitate larger panes of glass which allowed more natural light to enter the property.

At the small end of Victorian properties, there are the long rows of terraced houses. These are situated in almost every town and provide the novice developer with an ideal property to learn the ropes on. They tend not to vary too much in layout; the only differences are the orientation of the stairwell and which floor the bathroom is on. Victorian properties tend to be robustly designed and built but occasionally turn out to have no foundations. This means that a survey is highly recommended as it’s not unheard of to find subsidence to some degree in these properties. On a more optimistic note though, most of these houses that were built without foundations have now had the necessary work carried out to prevent catastrophic movement. Always make sure though…remember – caveat emptor.
Larger Victorian properties are often built in a ‘villa’ style. This means that they were built in a certain architectural style that the smaller terraced houses weren’t. This style can be shown in the ornate features that these properties have, such as intricate window mullions and projected porches. Much of this was influenced by the gothic revival period (1850-1880). These houses often had cellars and attic space for servant’s accommodation. Victorian houses tended to be either terraced or detached in towns and cities. Semi-detached Victorian properties are more likely to be found in rural areas as they were built for the workers on the large estates.

The Victorians were the first to introduce the beginning of what we know now to be Building Regulations.  From the middle of the 19th century, there was an increased importance placed on sanitation in properties. Of course this wasn’t always particularly comfortable in the small properties (i.e. outside toilets) but larger houses were more likely to have a (downstairs) cloakroom built. Proper drainage (meaning the sewers were enclosed) was also introduced. Towards the end of the Georgian period, it was only a very few properties that had running water. By the end of the Victorian era, hot and cold running water was available in the majority of homes. The cellars of Victorian houses were used for the storage of coal. The pavement outside and immediately in front of the property would have a small flap or cover that allowed the coalman to pour the coal directly into the cellar without having to carry the coalbags through the house.
The Victorians strongly believed that a ‘bare’-looking interior was a sign of very bad taste. Subsequently, they tended to fill their homes with as many knick-knacks as possible. It is extremely unlikely that anyone would follow such a trend in modern times. However, it’s also not a good idea to attempt to incorporate a modern, almost minimalistic look into a period home unless you absolutely know what you are doing and it can be done sympathetically. Most people can’t.   A compromise between the two would be to look for comfortable and classic looking fixtures and furniture to acknowledge the history of the property without overfilling it. The general intentional feeling of Victorian homes is of comfort. The Victorians prized their home-comforts more than the Georgians.

In common with the Georgian era, Victorian house interiors in towns and cities were generally not painted in particularly bright colours. This was because of a combination of the pollution and the fact that paint technology was not very advanced. As the era progressed though, more interesting colours became popular such a rich greens and reds. The general idea was to use a single colour as a main one and add several ‘secondary’ colours to compliment it. These secondary colours were intended to compliment the main one by giving a contrast but without clashing. Varying textures between mouldings, ceilings and woodworks was also popular towards the end of the 19th century.

The most obvious features of Victorian interiors is coving, cornicing and ceiling roses. Originally, Dado rails were fitted in dining rooms at chair-back height. This was to protect the walls from dining chairs hitting them whenever a diner stood up. Picture rails were fitted in drawing rooms and parlours, where they did actually support pictures hanging beneath. Coving and ornamental woodwork should be painted in gloss white paint. This gives a ‘clean’ look that contrasts with the colour of the wall (just make sure the lines are straight…).

Wallpaper also became popular in the Victorian era. Although it was not quite as you might imagine. The patterns were extremely bold and were full of florals and swirls. In common with the idea of filling the property with lots of ornaments, it’s unlikely a developer would seek out Victorian style wallpaper unless it was intending to be a very accurate ‘museum’-type property. A good compromise would be to look at the Laura Ashley type of wallpaper. This would be regarded as sympathetic to a Victorian property, without being too accurate (i.e. dark). There’s no reason for a Victorian property to ever be dark. If the interior furnishings and decoration are light, then in combination with the tall windows, a Victorian property can be a very pleasant place to be.

Don’t Overlook Unfashionable, Post-war Properties

 

Much of being a successful property speculator is establishing a target market and tailoring the investment or development property to appeal to it.  Unlike other walks of life, fashion in property tends to come and go quite slowly.  Period properties remain very popular and no doubt will remain so for the foreseeable future.  Meanwhile, many properties built in the post-war years were not particularly attractively styled (although generally they were actually built to a fairly high standard).  This lack of popularity often means that in comparison to period properties, these houses are undervalued.

These unfashionable houses tend to be overlooked by many potential developers and investors, as they believe they are uninspiring and will not be occupied or sold easily.  This need not be the case.   The appearance of many post-war properties has been changed substantially to incredible effect.

Consider the following photos:

Pictures kindly supplied courtesy of Erincastle Exterior Design; www.erincastle.co.uk

“The owners of this house wanted to add more space and improve its exterior. After an Erincastle Design Consultation, the front garden was improved, the front door and windows were restored to their original design and an extra floor was added to accommodate a new luxury Master en suite. The overall effect is obviously a breathtaking improvement, increasing the desirability and market value of the house.”

This amazing transformation was created by exterior design consultants Erincastle.  It’s not difficult to see that this programme of transformation would certainly add value to any investment or development project and therefore an opportunity to increase profit.   Many residential developers believe that the only way to change the appearance of a property is to repaint the exterior and tidy up the garden.   It is possible to achieve so much more.

The idea that a house considered by many to be ugly, can be transformed into one with character means that for now, there are more opportunities available than many people thought.  The more work that is carried out on a development property, the greater the opportunity to make a profit.  Taking the time to make substantial, tasteful changes to the exterior is certainly an area that is likely to pay dividends upon valuation for resale or letting.  However, the alterations carried out should not be too expensive.  The cost of the works should still be substantially less than the expected increase in the property value.

Obviously if the property is within a row of semi-detached or terraced houses, a dramatic change to the exterior is likely to look rather odd and create too much of a contrast.  Therefore when choosing a development property, your intended work should be taken into consideration.  The building’s original layout, profile and shape will influence the finished item.  A great deal of the property’s appearance can be changed; such as adding extensions, demolishing parts and altering roof lines.

Popular ways of changing the appearance of a modern property is by adding additional external finishes to the walls, such as replica wooden cladding to create the ‘New England’ look.   If windows are to be changed, this also provides an opportunity to change the property theme, such as sash windows to give a Victorian or Georgian look.  One of the most substantial changes that can be made is a roof alteration.  This is probably the most expensive of all cosmetic works but can achieve the most substantial change of look.  If much of these things need changing as part of the intended development work, then the additional cost involved in changing the property ‘look’ might not amount to a great deal more.

It should be pointed out that under the Town & Country Planning Act 1990, changing the external appearance of a property does correspond to the legal definition of development. Depending upon the amount of work you intend to carry out, planning consent will almost certainly be required.

For new-build projects, you might feel that options are limited in finding designs that don’t look too artificial.  Erincastle also have experience in creating designs that genuinely look like listed buildings:

“TOWER HOUSE ” A NEW BUILD BESPOKE HOUSE DESIGNED BY STEVEN JAMES TYLER, COPYRIGHT ERINCASTLE 2006.

“HILL HOUSE ” – A NEW BUILD BESPOKE HOUSE DESIGNED FOR AN UNUSUAL HILLSIDE PLOT BY STEVEN JAMES TYLER, COPYRIGHT

 

 

Note: If the property you intend to carry out these works to is listed however, or in a conservation area; it is highly unlikely that you will be granted permission to change the look of the property.  Houses that fall into these categories might not necessarily be full of charm, but unfortunately they cannot be changed without the express permission of the local planning authority.

Property Use Classes

*Please Note – Property Use Classes evolve regularly and appropriate diligence is highly recommended.  The following article simply provides an overview.

Within the very large field of property, there are several categories and sub-categories of building.  The reason for this is that council planning departments use these classes when planning residential, commercial and retail developments in an urban or rural environment.  It is far easier to refer to the use classes as they are, rather than a description such as ‘Industrial’ or ‘retail’.  I have personally been faced with which particular category a trade-counter falls into….retail or industrial?

The classes are issued by The Secretary of State as he/she is ultimately responsible for all UK planning matters (a method of appeal against planning decisions is to address the Secretary of State).  In most cases, converting a property so that it moves from one use class to another, needs the grant of planning permission before work is allowed to go ahead.  There are some exceptions however, such as a flat can be added to a retail property provided it is used in association with the retail property.

The table of Use Classes is as follows:

Use Class Use Description Is Change Permitted?
A1

Shops

 

Sale of goods and cold food, retail warehouses, hairdressers, travel and ticket agencies, post offices, domestic hire shops, funeral directors, dry cleaners, internet cafes No change of use without permission, except to A1 plus single flat

 

A2

Financial and professional services

 

 

Professional (excluding health and medical services) and financial services (banks and building societies); other services appropriate in a shopping area where the services are provided principally to visiting members of the public Change to A1 permitted only if there is a ground floor display window

 

A3

Restaurants and cafes

Sale of food and drink for consumption on premises, e.g. in restaurants, cafes Change to A1 or A2 permitted
 

A4

Drinking establishments

Public house, wine bar or other drinking establishment Change to A1 or A2 or A3 permitted

 

 

A5

Hot food takeaways

 

Sale of hot food for consumption off the premises Change to A1 or A2 or A3 permitted

 

Sui Generis

 

Launderettes, taxi businesses, car hire businesses, filling stations, scrapyards, shops selling or displaying motor vehicles for sale, retail warehouse clubs No change of use permitted

 

 

 

 

B1

Business

 

 

 

a Offices other than financial and professional services providing for the visiting members of the public

b Research and development

c Other industrial processes appropriate in a residential area

 

 

Change to B8 (only up to 235 m2 of floor space) permitted

 

 

 

B2

General industrial

 

General industry, not within B1 Change to B1 or B8 (only up to 235 m2 of floor space)

 

B8

Storage or distribution

Storage or distribution centres Change to B1 (only up to 235 m2 of floor space) permitted
Sui Generis

 

Work registerable under Alkali etc, Works Regulation Act No change of use permitted

 

C1

Hotels

 

Hotels, boarding and guest houses, provided that care is not provided No change of use permitted

 

 

 

C2

Residential institutions

 

Residential accommodation for provision of care (e.g. old age homes); residential schools and colleges and training centres; hospitals and nursing homes No change of use permitted

 

C2A

Secure residential accommodation

 

Prison; young offenders institutions; detention centres; secure training centres; custody centres; short-term holding centres; secure hospitals; secure local authority accommodation; military barracks No change of use permitted

 

C3

Dwellinghouses

 

 

Dwellinghouses for individuals, families and up to six individuals living as a single household Subdivision of dwellinghouses into two or more dwellinghouses not permitted
C4

Houses in multiple occupation

Use of a dwellinghouse by not more than six residents as a house in multiple occupation Change to C3 permitted

 

Sui Generis Hostels No change of use permitted
D1

Non-residential institutions

 

Clinics, health centres, crèches, day nurseries, day centres, consulting rooms (not attached to doctor’s house); museums, libraries, art galleries, public and exhibition halls; non-residential schools, colleges and other educational centres; public worship or religious instruction; law courts No change of use permitted

 

D2

Assembly and leisure

 

Cinemas, dance and concert halls; swimming pools, skating rinks, gymnasiums; other indoor and outdoor sports and leisure uses, bingo halls No change of use permitted

 

Sui Generis

 

Theatres, amusement arcades and centres, fun fairs, nightclubs, casinos (as from 6 April 2006) No change of use permitted

 

10 Common Planning Permission Pitfalls and how to avoid them

Much of what people know about planning permission comes from the media such as the programme Grand Designs, the experience of friends and family, or from objecting or would-be-objecting to a neighbour’s plans.

Of the process – and the cost – many actually know very little, and the wealth of information available on the internet can be a little daunting. It’s hard to know where to start, let alone where you’ll end up and what you’ll go through to get there.

Businesses have more to consider than residential owners, when what you do in a building is as monitored as the physical changes you make.

Without specialist knowledge and with an excess of enthusiasm, it’s easy to make mistakes in the planning process.

Here we introduce some of the common pitfalls when dealing with planning permissions.

1. Do you need planning permission?

First of all, consider whether you actually need planning permission at all. Most areas (conservation areas excluded) benefit from a ‘Permitted Development Order’ (PDO), which means that changes of a certain size or height, or distance from neighbours, do not require planning permission. The rules can be found on the planning portal website but it’s important to look at them carefully and perhaps consult a professional.

If a property has already been extended this might prevent further changes under a PDO. Recent legislation also means that in many areas properties used as offices can be converted to residential under a PDO – although discussion with the council may still be required.

2. Avoid the DIY trap

Do-it-yourself has its place, but the rule to remember is to stay within your skillset. Often it amounts to a false economy to have a go yourself. Consider a tiled wall that slopes, or a door that won’t close. This is no less true when applying for planning permission, which involves certain stipulations, as well as local considerations, technical requirements and possibly specialist knowledge.

‘Having a go’ at the application may be cheaper in the short term, but it may result in a failed application, or with conditions attached that compromise your plans. There are professionals who can assist, for example:

Designers. These will not only maximise the potential use of space but will be working with planning considerations in mind.

Architects. As above, but they will also be able to draw up the necessary plans, especially where the works involve structural changes.

Planning consultant. A planning consultant, particularly a local one, will be familiar with the developments that have been granted permission in the vicinity – and more importantly, the ones that haven’t. They will also be able to help you address areas of your application that might elicit objections from the council, local bodies such as Highways, or neighbours, in order to resolve any issues before they are raised. Planning consultants can also be useful if you have to appeal a decision.

In fact, if you use the above services, you probably don’t need to worry about most of these points.

3. Can you really afford the investment?

There is no point in successfully obtaining planning permission for works that ultimately will prove too expensive to carry out properly. It’s difficult to budget for building works when you’re not an expert in that area.

One option is to obtain a builder’s estimate. It’s not a quote for works, but should give you an idea of how much is involved. Then add 20%. Contingency is always required for items not taken into account and latent problems that only become apparent when the diggers start digging. Also, of course, take into account any ancillary fees, such as professionals’ fees, consents planning and building regulation fees.

4. Adhere to the rules and instructions

Planning permission and the process of obtaining it has evolved over many years. Councils may have different considerations, requirements and restrictions, and a chat with one of the planning officers will always be useful. The forms accompanying the application will need to be filled in properly, accurately and comprehensively.

Every application, from a two-storey extension to a full housing development, will need:

  • A location plan – obtainable from, for example, the Land Registry or from the deeds
  • The existing and proposed site layout
  • Existing floor plans and elevations and corresponding proposed ones
  • Proposed sections
  • External details such as doors, windows, drainage, roof tiles, render.

Faults and incomplete details may lead to a rejected or failed application, or extensive to-ing and fro-ing which is costly in terms of time and money.

5. Planning permission is not the only permission you need

It’s easy to get carried away with the project at hand, however, before planning permission is even applied for – and ideally before any money is spent on professionals – consider who else might need to give you permission for any works or change of use.

If your property is leasehold, it is likely that permission from a landlord or its agent is required. This is easily forgotten in the case of a long-term leasehold house, for example, where the landlord is largely absent other than an annual collection of nominal rent.

If there’s a clause in the lease that prevents alterations without permission, then consent should be sought. This can be an expensive business as landlords will be aware of the importance of the project and may wish to capitalise on your desperation.

If you go ahead anyway without consent, not only will this cause problems when you come to sell the property, but retrospective permission can be much more expensive to obtain from a landlord than permission in advance – because the landlord knows you need it.

Make sure you check the deeds, even if your property is freehold there may be restrictions (restrictive covenants) in the deeds preventing certain changes to the property. This ranges from properties 200 years old to new build properties.

If you’re unsure about any restrictions that might be present concerning your property, arrange to visit your solicitor who will be able to advise you. Often a quick scan of the deeds is all that will be required.

6. Change of use is no exception

It may be tempting where businesses are concerned, particularly small ones, to not allow planning permission to stand in the way of the perfect space, particularly if it feels the changes and/or occupation of the property are likely to be overlooked. It also may be tempting to persuade oneself that one’s business has not changed the nature of one’s home, for example, when in fact the child-minding business has become more like a nursery.

Care needs to be taken and complicated rules taken into account when dealing with use classes. A café owner may find that they have to grill all their meat and roast all their vegetables for their sandwich fillings off the premises (i.e. at home) because the use class of their leased premises does not allow food to be cooked on-site. The last thing a business needs is a visit from the planning enforcement officer and a breach of the terms of the lease. No premises means no business.

7. Don’t change your mind

Once the planning application has been submitted, it can be difficult to make changes, and even harder once it’s been approved. Anything other than minor changes might require a whole new application. So make sure you check and double check before submitting, not after.

8. You can’t get away with not having planning permission

While there is legislation in place that, in certain circumstances, mean action cannot be taken for works carried out over a number of years ago, this is not the situation you want to find yourself in. There is no guarantee your works will fall into this category, and there are stories of planning enforcement to be found in the media or on the grapevine, from dormer windows having to be removed to whole properties having to be demolished. And while you may live or work happily in a property without planning permission in place, the last thing you want when you move on – whether selling the property or at the end of a lease – are questions being asked and delays being caused – or even claims of damages by a landlord – arising from lack of appropriate consent. Solicitors (especially the other party’s solicitors) can be hard to satisfy when it comes to dotting the I’s and crossing the T’s.

Indemnity insurance is possible, but makes some owners and lawyers uncomfortable, while retrospective planning permission is far from guaranteed – and can invalidate or prevent the obtaining of indemnity insurance.

9. Don’t forget building regulations

The flip side of the planning permission coin is building regulations. It would be rare where planning permission is required not to also have to comply with building regulations. These deal largely with internal changes and energy efficient measures as well as gas and electrical works. These will also need to be signed off, often long after planning permission has been done and dusted.

It is vital not to forget the final signing-off for building regs purposes. It’s much harder to get retrospective building regulation approval, particularly where the site hasn’t been visited mid-job and where structural works such as RSJs need to be assessed.

10. Letting your permission lapse

Planning permission will last for a fixed number of years and can be passed on to future buyers. If you are planning on carrying out the works, don’t let the date pass you by. There is no guarantee that the permission will be re-granted or extended, particularly if legislative or policy changes have been introduced in the meantime, perhaps in relation to the ratio of residential property to business premises in a particular area, or where restrictions have been imposed on the number of houses of multiple occupation in ‘student’ areas.

 

Eugene O’Sullivan, is a commercial property expert and Director at Morgan Pryce – London office search, negotiation and project management agents who act exclusively for tenants.