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What are the new rules for farm building conversions?

As pressure on UK rural housing stock increases, Ben Pridgeon, associate at Cheffins, looks at what farm opportunities there are.

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What are the new rules for farm building conversions?

A new change in building and planning regulations encourages farmers to take a closer look at their redundant assets in a bid to improve returns.

 

Redundant agricultural buildings can see values increase by unprecedented levels following prior approvals.

 

As pressure on rural housing stock increases, the Government’s revised guidance on Class Q permitted development rights, released in 2015 and then amended this year, has the intention of increasing the number of permissions being granted.

 

As statistics on permitted development rights released by the Department for Communities and Local Government illustrated, 49 per cent of applications to convert agricultural buildings into homes were refused in the third quarter of 2017.

 

As these figures show, obtaining Class Q prior approvals is not as easy as it may have been initially reported – hence buildings which already have a prior approval in place are becoming increasingly desirable for developers or owner-occupiers, which is having a knock-on effect on prices achieved.

 

Changes to legislation this year increased the thresholds associated with permitted development rights for Class Q prior approval applications.


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From April 2018, the maximum permissible floor space associated with the building subject to the change of use increased to 465 square metres from 450 square metres. Likewise, the number of permissible units increased from three to five.

 

This reflects the importance the government attaches to Class Q prior approval applications in increasing housing stock, particularly in rural areas – and it also suggests Class Q applications are here to stay.

 

For farmers considering selling up a building, it is important to remember uplifts in value are significant for buildings with Class Q approvals and, although they may differ depending on location, landowners could see a significant return on their agricultural buildings for a modest outlay to prepare a prior approval application.

 

We have seen values achieved for these types of buildings with prior approval in place can increase by up to six times as prior approvals continue to be difficult to achieve.

Planning legislation is complex and planning guidance and case law changes regularly, which brings with it its own challenges.

 

Every potential Class Q building will have its own individual issues which may need to be addressed. For example, the structural condition of the building will have a significant impact on whether the building can reasonably be converted into a dwelling.

 

Such information will be scrutinised by the local planning authority and it is important for farmers to understand the nature and scope of legislation in order to gauge the likelihood of gaining a successful outcome.

Actions to consider

  • Look to keep evidence the building’s use thus far has been purely agricultural
  • Hold on to all relevant evidence in the run-up to submitting an application
  • Consider an application may not be approved if the agricultural building is in a location where it is impractical for it to be used as a dwelling; for example it is next to a grain dryer or other noisy machinery

Price uplifts achieved by Class Q approval

 

An unconverted barn measuring 2,300 sq ft in Suffolk was sold for £223,000, representing an uplift of 646 per cent on its agricultural value of £34,500 (working to an agricultural value of £15 per sq ft).

 

Similarly in March, an unconverted barn with prior approval which measured 1,797 sq ft in Cambridgeshire sold for £181,597, showing a value uplift of 673 per cent based on its agricultural value of £26,995.

 

At private treaty, another unconverted barn with prior approval was sold for £330,000 showing an uplift of 687 per cent against its agricultural value of £47,970.

 

Source: Cheffins property auctions

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