Bridging Loan News:- Builders about to go on-site or finish up projects are facing delays as many councils are failing to sign-off planning conditions within the statutory period.
The National Federation of Builders, NFB, head of housing and planning policy Rico Wojtulewicz said: “This is causing industry real problems as it means current projects are unable to start, or complete.
“We are raising this with the government, who need to work with the industry and local planning authorities to solve this problem so that projects can be finished before temperatures drop and work grinds to a halt, again.”
The statutory period for granting a planning condition is between three to eight weeks, however, many developers have been waiting for three months for a sign-off.
| Product | Max LTV | Up to 50% LTV | 50.01 – 65.00% LTV | 65.01 – 75.00% LTV | Term & Repayment | Arrangement Fee |
|---|---|---|---|---|---|---|
| Residential Including Light Refurbishment | Up to 75% Lower of PP or MV | 0.43% pm | 0.53% pm | 0.60% pm | Maximum term 24 months No minimum interest or ERCs Interest Fully Rolled Up, Part-Rolled Up or Serviced (subject to affordability) The net advance will be less total potential interest over the term with the gross loan calculated as interest for the entire term and the arrangement fee added. | 1% -1.5% Full fee added to the loan. |
| Semi Commercial Including Light Refurbishment | Up to 75% Lower of PP or MV | 0.6% pm | 0.6% pm | 0.6% pm | ||
| Commercial Including Light Refurbishment | Up to 70% Lower of PP or MV | 0.75% pm | ||||
| Residential Heavy Refurbishment | Up to 75% Lower of PP or MV | 0.60% pm | 0.65% pm | 0.7% pm | ||
| Commercial and Semi Commercial Heavy Refurbishment | Up to 70% Lower of PP or MV | 0.83% pm | 0.83% pm | 0.7% pm | ||
The NFB said councils should work with the industry to revisit how conditions are signed off. It said one possible solution would be for conditions to be discharged when they miss the statutory deadline.
The industry has written to housing secretary Robert Jenrick calling for the problem to be resolved. A spokesperson for the ministry of housing, communities and local government, MHCLG, said it was looking into the matter.
Earlier this week Mr Jenrick, himself at the centre of controversial planning issue, said planning permissions about to expire during the lockdown had won a reprieve.
Sites with an expiry date from the start of lockdown to the end of this year will have their consent extended to April 1, 2021. The government has calculated from March 23 to the end of this month 430 residential permissions providing 24,800 new homes would have expired. Planning permission usually expires after three years if work has not started on-site.
NFB chief executive Richard Beresford said: “Extending expiring planning permissions will secure jobs, give the supply chain certainty and ensure businesses still have a pipeline of work to deliver.”
Nearly two-thirds of NFB´s housebuilding members are estimated to have at least one planning permission extended under the reprieve.
The government has also given the planning inspectorate the ability to use more than one procedure – written representations, hearings and inquiries – at the same time when dealing with appeals.
This approach was piloted last year and more than halved the time taken for appeal inquiries, from 47 weeks to 23 weeks.
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Brokers Hank Zarihs Associates said property development lenders were keen to see the planning process speeded up as this would make it easier for SME housebuilders to develop more sites.