Insights Commercial Property Law – Key Considerations (June 2023)

Our June 2023 summary of the latest developments in Property law and practice is as follows:

The Department for Levelling Up, Housing and Communities has published a technical consultation on the new Infrastructure Levy in England. The aim of the new Levy is to reduce the complexity and uncertainty of the current CIL arrangements. It will be a mandatory and locally determined levy which, despite commentary in the 2020 White Paper proposal, will sit alongside requirements for Section 106 agreements which are being retained.

Rates will be set as a percentage of the final Gross Development Value of a completed development as opposed to the current CIL system which looks at floor space. This will allow the Levy to adapt to the value of a development and bring about a fairer result. If the GDV is more than anticipated the Levy will capture that. If less than expected, the contribution will be less.

The Levy will help fund infrastructure at a local level, including roads, transport, flood defences, schools, emergency and rescue services, etc.

The consultation closes on 9 June 2023.

The Government is consulting on the introduction of a new use class and registration scheme for short term lets in England. This comes after proposals to control the growth of short-term holiday lets which are reported as “impacting adversely on the availability and affordability of homes to buy or to rent for local people”. The consultation seeks responses in regard to the following:

  • The introduction of a new use class for short-term lets
  • The potential introduction of a new permitted development right for the change of use from a dwellinghouse to a short-term let
  • The potential introduction of a new permitted development right for the change of use from a short-term let to a dwellinghouse
  • How a flexibility for homeowners to let out their home for a number of nights in a calendar year could be provided through either changes to the dwellinghouse use class or an additional permitted development right
  • The introduction of a planning application fee for the development of new build short term lets

Consultation closes on 7 June 2023.

The Charities (Dispositions of Land: Designated Advisers and Reports) Regulations 2023 (SI 2023/467) will come into force on the day upon which sections 19 and 20 of the Charities Act 2022 will come into force. These sections will make amendments to advertising, advice and reporting requirements for dispositions of charity land. They are expected to come into force this Spring.

If a charity is disposing of land it must comply with the requirements of the Charities Act.  For a lot of disposals, a charity requires advice under section 119 of the Act. The Regulations broaden who can be a “designated adviser” for the purposes of section 119 and simplify the requirements for designated advisers’ reports. Soon, a designated advisor will include fellows of the Central Association of Agricultural Valuers or a member of NAEA Propertymark (National Association of Estate Agents) at fellow grade (as an alternative to being a fellow or professional associate of the Royal Institution of Chartered Surveyors).

This gives charities greater options in selecting an adviser to provide the necessary advice in relation to a proposed disposal. This may sometimes lead to a more cost-effective route to disposal. Trustees will, however, need to be satisfied that they have selected the best type of adviser for the job, which will include ensuring that the adviser has the appropriate qualification and is covered by an adequate insurance policy.

In terms of the simplification of the report that the adviser provides, the report will need to include:

  1. the value of the relevant land;
  2. any steps which could be taken to enhance that value;
  3. whether and, if so, how the relevant land should be marketed;
  4.  anything else which could be done to ensure that the terms on which the disposition is made are the best that can reasonably be obtained for the charity; and
  5. any other matters which the adviser believes should be drawn to the attention of the charity trustees.