Is the Rental Market a Solution For London's Housing Crisis?

Housing experts are looking skywards to find a solution to London's acute housing shortage. The capital is facing a severe scarcity of open plots besides the skyrocketing land prices. Several restrictions, like green belts, worsen the prospect of building new homes. The rising population deserves practical solutions to cater to the growing need for housing.

What is airspace development?

Airspace development is adding a couple of floors to old buildings. Rooftop development is an easy way to increase the density of homes in apartment buildings, subject to structural assessment that the building can take the extra weight. Typically we have seen this on residential buildings, however, one can also consider adding floors to commercial buildings, such as offices, public buildings, or supermarkets. Established landlords and developers can optimize their existing properties to maximize the utility of the existing space.

Airspace development is a more sustainable option than constructing something from the scratch. Rooftop developers focus on improving the building's exterior to improve aesthetics for marketing appeal. Repurposing and refreshing older buildings is often a part of rooftop development. It helps avoid unnecessary demolition.

Attractive benefits of rooftop development

Vertical expansion appears to be a suitable way to help London meet the urgent housing demand, as building outwards is largely protected greenbelt and not practical anymore. Rooftop development of the capital's municipal buildings can support 630,000 households. The solution will provide thousands of new homes to homebuyers besides the following benefits:

Lower service charges

Higher market value

Higher energy efficiency

Safety upgrades

Rooftop development causes minimum disturbance to the city skyline and existing communities. It can address the repair and improvement needs of the old buildings benefiting the existing residents. And, often the new leases of rooftop properties take over the repairing covenants of theor roofs. Several cities across the globe have implemented the concept of rooftop homes successfully to combat overcrowding.

Considerations for the rooftop development

Before the redevelopment process of adding floors to an existing property, a developer assesses the project's viability. Rooftop development may not be suitable for all old buildings. They must consider the structural strength of the old building and estimate whether the new construction will comply with safety and health regulations.

With extra floors the existing building may enter a new height category which can mandate additional upgrades affecting the entire building. The rooftop developer must assess the permissions and budget to incorporate the upgrades. They should also take into account enhancements for the existing residents to outweigh the nuisance that development will cause them.

The way ahead

Despite the relaxation of planning regulations by the government in 2020, there is little significant progress in the roof development of old properties. There are multiple reasons for the lack of roof development activities. These include: objections from the residents and complexities of the projects. Each year, a number of developers shelve projects because of opposition from the residents, or because they had not understood the intracacies of the lease.

Roof development activities cause considerable inconvenience to residents because of construction noise, dirt, construction compounds, damage to gardens and more.... Developers need to seek the support of residents before planning rooftop developments. Proper planning, such as off-site construction, can boost the success rate of airspace development projects. Residents may be more likely to support rooftop development projects if the developer promises them well-designed homes with greater environmental efficiency.

The takeaway

Planners and developers are contemplating innovative ideas to address the housing crisis through airspace development as one strand of trying to overcome the shortage of affordable properties in London. Rooftop developments have excellent potential to resolve housing problems in large cities like London. These projects increase the value of the property, besides adding several new homes to the existing property. The cost of such homes can be cheaper than new-build homes. Residents can benefit from lower service and maintenance charges as more properties are sharing the expenses and often get building upgrades as a sweetener along the journey.

How Ringley can help

Establishing the value of airspace for development pre or post planning means that you will need an RICS red book valuation. Our Valuers are skilled at deriving the airspace value using the residual valuation method. This means we look at the value of rhe airspace as a plot, deduct the building costs, professional fees, structure enhancements, service installations and improvements to the original building below as well as profit to derive the airspace or plot value. Further considerations include whether landlord's consent is required as it it is rhen consideration will need to be paid. When it requires the marrying of two interests to release the development value e.g. via a landlord's consent a 'marriage value' calculaton derives the premium to be paid for such consent. Ordinarily this is 50 percent of the land or plot value.

So if you find a roofspace or airspace development opportunity speak to one of our surveyors today.

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