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Is Britain’s countryside at risk? Anger over ‘developers’ charter’ planning reforms

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A bid to deliver 300,000 homes a year in England by 2025 under proposed planning reforms has raised the ire of at least 90 Tory MPs, including Theresa May.

Under the blueprint for change, which has been dubbed a ‘developers’ charter’, planning permission for ‘substantial development’ would automatically be given in certain areas.

The discontent cost the Government the Chesham and Amersham by-election last month. The Lib Dems, who took the seat, exploited the proposals to raise concerns over construction in the Chilterns. 

Reforms: Under the blueprint for change, dubbed a 'developers' charter', planning permission for 'substantial development' would automatically be given in certain areas

Reforms: Under the blueprint for change, dubbed a ‘developers’ charter’, planning permission for ‘substantial development’ would automatically be given in certain areas

Meanwhile, environmental groups fear the relaxation of the system risks the loss of natural habitats, and archaeologists say the new regime would not allow sufficient time to excavate on building sites, meaning fewer historical treasures would be unearthed.

How could the new system change things?

The new system would require local authorities to draw up ten-year plans, in which land in their district would be classified as ‘protected, for ‘renewal’ or ‘growth’.

Protected zones, such as areas of Green Belt, natural beauty or at risk of flooding would be restricted.

Councils would be required to look favourably on development in ‘renewal areas’. These are places in towns and cities that have already been built on, or strips of land in or at the edge of villages.

Automatic initial planning consent would be given on ‘growth areas’; the most contentious aspect of the proposed relaxation.

Despite the bill being extended to the whole of the UK, the majority of changes will only apply to England.

Why does the Government want these reforms?

Under the current rules which date back to 1947, permission for development is made on a case-by-case basis.

These arrangements are considered cumbersome and a significant bar to home ownership among the members of Generation Rent who Boris Johnson wants to turn into Generation Buy.

The Prime Minister takes issue with aspects of the existing system, including the attention paid to protected species such as the great crested newt, whose discovery on a site can delay construction.

He said: ‘The newt-counting delays in our system are a massive drag on the productivity and prosperity of this country.’

Going for growth: Robert Jenrick, Secretary of State for Housing, aims to increase the number of new homes that are built every year from about 240,000 to 300,000

Going for growth: Robert Jenrick, Secretary of State for Housing, aims to increase the number of new homes that are built every year from about 240,000 to 300,000

Does this mean we have no say in our neighbourhood?

The Government says that making the planning system digital (at present, it’s document-based) will make it easier for locals to get engaged in development in their area and they should be able to become involved in the compilation of the ten-year plans.

At present, only about 3 per cent of the population participates in planning —which rather gives the lie to the assertion that we are a nation of Nimbys.

But people would have far less freedom than before, if any, to make known their views on individual planning applications — which some say makes the new system significantly less democratic.

Will there be any quality or design standards?

The basis of the objection to many new developments is the look of the scheme. 

Some housebuilders will reflect local ‘vernacular’ architectural styles and materials in the design of their homes; others rely on standard models not adapted to their setting.

A National Model Design Code is to be published in the autumn, setting out guidelines on such things as ‘the arrangement and proportions of streets and urban blocks, successful parking arrangements and the placement of street trees’.

The Code will lay down design principles that councils must observe when giving consent to developments.

But it’s not clear how these criteria will achieve the top quality homes that we need, or avoid a repeat of the cladding scandal that’s blighting the lives of the owners of some new-build properties.

How soon will the system be put in place?

The changes are not yet law. David Bainbridge, a director of planning at Savills, says that the Planning Bill which will contain the proposals has not yet appeared and that it will face a stormy time in its passage through Parliament.

This week, Robert Jenrick, Secretary of State for Housing, promised that the Bill would be published later this year.

He will not wish to be swayed in his aim to increase the number of new homes that are built every year from about 240,000 to 300,000. 

But Mr Bainbridge makes the point this could start to be achieved if, for example, schemes that now have planning permission are obliged to go ahead.

Will the Government listen to the protesters?

The proposals are regarded by some as ‘electorally toxic’ despite the early abandonment of the plan to use a computer algorithm to determine how many homes ought to be absorbed in an area. This risked ‘concreting over’ wide swathes of southern England.

There may be more emphasis now on development on already built-on brownfield sites in urban locations.

Yet the dismay caused by this threat to the countryside has coloured the perception of all of the reforms.

The latest source of dissent is the lack of assurance of about how many affordable homes will be produced by the system.

How can the upheaval be justified if it does not help a significant number of first-time buyers onto the ladder?

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Patrizia invests in logistics property near Milan (IT)

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Patrizia AG has acquired a newly built cold storage logistics asset near Milan, Italy, from Savills Investment Management. The 31,000m² cold storage asset was completed in Q2 2021 and is fully let to Kuhne & Nagel, a leading pan-European 3rd party logistics company, and Movi.Log Srl, a frozen food distributor, with a WALT of 7.5 years. The property has been built to a high specification with sprinklers, elevations and ample refrigeration space that has a temperature range between 4°C and -28 °C. Sustainability was a key consideration during its development. The asset includes two photovoltaic plants for a total power capacity of 2.5MW and is targeting a BREEAM rating.

 

The property is located in Casorate Primo, a municipality in Lombardy between the cities of Milan and Pavia, a prime industrial and logistics location in northern Italy. It benefits from excellent transport connectivity via the nearby A7 motorway which connects Milan with Genoa and enables access to France and Switzerland.

 

Pierluigi Scialanga, Head of Transactions at Patrizia Italy, commented: “The property is well located and has excellent sustainability credentials, while lettings to tenants with strong covenants will deliver long term reliable returns. Our Italian AUM has grown significantly in recent years to now over €1bn with plans to grow further. Logistics is a strategic sector for Patrizia Italy. We have so far invested €400m in logistics and have a pipeline of a further €160m of logistics transactions which we are completing.”

 

Rob Brook, Head of Alternative Investments and Head of Logistics at Patrizia, added: “Cold chain is an exciting area of logistics for Patrizia to be involved in. Demand is predicted to grow steadily in the next few years, especially due to a growing need for reliable supply chains for biopharmaceuticals, vaccines and clinical trials. High demand across Europe combined with low vacancy rates makes cold chain logistics an ideal growth area for the future.”

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Crackdown on second home and holiday let tax dodgers

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The Government is cracking down on second home owners who claim their properties are holiday lets for tax purposes.

Communities secretary Michael Gove is set to close a tax loophole which has allowed second home owners to avoid thousands of pounds per year in taxes, without proving that the property was ever rented out. 

The new rules will target those who register their holiday lets as small businesses, meaning they are eligible for business rates instead of council tax.

But the majority pay no business rates at all under the system, because they have ‘rateable values’ of under £12,000 based on the property’s rents, size and usage. 

Crackdown: Those registering second homes as businesses could fall foul of new rules

Crackdown: Those registering second homes as businesses could fall foul of new rules

A second home can be registered as a small business if it will be available as a holiday let for 140 days or more in the coming year.  

However, there is currently no requirement to provide evidence that a property has actually been let out, leaving the system open to abuse. 

This has caused anger in areas that have lots of second homes, such as Devon, Cornwall and the Lake District, as some locals believe property owners are not paying their fair share towards council services.

According to Ray Boulger of mortgage broker John Charcol: ‘Some 97 per cent of the 65,000 holiday let properties in England have rateable values of under £12,000, which means they qualify for small business rates relief and pay no rates at all.’

The new rules aim to change this by ensuring that only those properties which are actually rented out for 70 days per year, and available to rent for 140 days, get the tax break. 

Kurt Jansen, director of the Tourism Alliance said: ‘It makes a very important distinction between commercial self-catering businesses that provide revenue and employment for local communities, and holiday homes which lie vacant for most of the year.’

This is Money explains how the new system will work, and how second home and holiday let owners can make sure they are following the rules. 

Locals in UK holiday spots have expressed anger at second home owners, who they say are not contributing their fair share to the community and services via council tax payments

Locals in UK holiday spots have expressed anger at second home owners, who they say are not contributing their fair share to the community and services via council tax payments

What do the new rules say? 

The rules are based on the amount of days a property is rented out in each tax year. 

To qualify for business rates instead of council tax, the new legislation will require second home owners to prove their property will be available for ‘commercial short term, self-catering rentals’ for at least 140 days in the coming year. 

They will also need to prove that, in the previous year, it was available for letting for 140 days and actually rented out for at least 70 days. 

This is designed to prevent second home owners from registering their properties as small businesses, and then not actually renting them out.  

‘We will not stand by and allow people in privileged positions to abuse the system by unfairly claiming tax relief and leaving local people counting the cost,’ said Gove when he announced the policy. 

‘The action we are taking will create a fairer system, ensuring that second homeowners are contributing their share to the local services they benefit from.’

Anger among locals has increased since the start of the pandemic, as wealthy people snapped up UK holiday lets when travelling abroad was not allowed. 

Exempt: As they are assessed differently to bricks and mortar properties, caravans being used as holiday lets will not come under the government's new second home tax rules

Exempt: As they are assessed differently to bricks and mortar properties, caravans being used as holiday lets will not come under the government’s new second home tax rules

What counts as a holiday let?  

The business rates rules for holiday lets only apply to buildings, or self-contained parts of buildings, that would otherwise be assessed for council tax. 

Caravans will not generally be subject to the rules, as they are usually assessed for business rates under a different system to bricks and mortar buildings. 

When it comes to counting the days that a property was rented out, the government says that only days where the property was occupied at the end of the day should be included.

So if a property was let out from Friday evening to Sunday morning, it would have been let for two days for the purposes of meeting the holiday lets criteria.

Is this definitely going ahead, and when will the rules come into force?

The government has concluded its consultation on the new policy, which started before the pandemic in 2018. It plans to implement the changes from 1 April 2023. 

However, the legislation needed to do so has not yet been passed in parliament.

While the government has made clear its intention to enshrine the new rules in law, they are not set in stone just yet. 

How much would I pay under each system?

Small businesses can find their rateable value on the Government website. 

Those with a rateable value of below £12,000 are not eligible for business rates, while those with a value of up to £15,000 pay special tapered rates. 

For those with a rateable value of between £15,000 and £51,000, they will need to multiply that value by 49.9p to find out their rateable value. They can then subtract any discounts that they may be entitled to, which the government details here

Those with a rateable value of more than £51,000 will follow the same calculation, but with a higher multiple of 51.2p.  

As for council tax, second homes are charged at the same rate as main residences. 

Individual councils may decide to give a discount for second homes, or on homes that have been empty for two years. Owners should contact their council to find out if this is available.

Under the new rules, the government has said there will be no rate or council tax discount for those with lots of properties.  

What if I have a new holiday let with no proof of lettings for last year?

Those acquiring a new holiday let and wanting to register for business rates will not be able to prove that their property was available to let for 140 days and actually let for 70 days in the past year, as required by the new rules. 

Until the owner can provide that proof, they will be subject to council tax – meaning most will need to pay that for at least the first year of their ownership. 

After that, they can ask the Valuation Office Agency (VOA) for a business rates assessment. 

This is the government body that handles everything to do with business rates, and it will be responsible for policing the new rules once they come in to force. 

Don't lie low: Property owners who don't think their property meets the new letting rules, but who are paying business rates, are advised to inform the VOA as soon as possible

Don’t lie low: Property owners who don’t think their property meets the new letting rules, but who are paying business rates, are advised to inform the VOA as soon as possible

I don’t think my property will meet the criteria for last year. What should I do?

Some holiday let or second home owners will not be able to prove that their property was available to let for 140 days and actually let for 70 days in the past year. 

The government says people in this position ‘should notify the VOA as soon as possible, so that their property can be assessed as domestic and revert accordingly to (or be given) a council tax valuation.’ 

It adds that failure to do so could result in a large, backdated council tax bill.

How will it be policed?

When seeking a new business rates valuation after April 2023, second home owners will need to provide evidence that their property was let or available to let for the required periods.  

The government has said will communicate the exact method for collecting evidence before the new rules come into effect.

However, this is expected to include things like the property being listed on rental websites, and evidence of payments from guests.  

‘Evidence of lettings will be required, such as at least one website or brochure used to advertise the property and letting details and receipts,’ says Boulger. 

Those already paying business rates on their holiday let or second home, and who meet the letting requirements, do not need to submit anything. 

However, they should ensure that they have evidence of the last year’s lettings by April 2023, as the VOA may ask for them at any time. 

‘The only impact the new rules will have on genuine holiday let properties might be the need to provide the evidence outlined above, but this information should be readily available for the owner’s tax return,’ says Boulger. 

What if the property is used by family and friends?

Those who regularly allow family and friends to use their properties for free could find they are no longer eligible to register as a small business under the new rules. 

The government says lettings counted in the 70-day period must be on a ‘commercial basis’ at ‘market rates’ and that ‘lettings to friends or relatives at zero or nominal rents will not be covered.’ 

No more mates rates? Money will need to change hands when the property is let, or it will not be counted as a holiday letting under the government's new 70-day rule

No more mates rates? Money will need to change hands when the property is let, or it will not be counted as a holiday letting under the government’s new 70-day rule

Of course, if there are 70 days of commercial lettings on top of discounted ones to friends and family, this will not be a problem.  

Boulger says owners should still be able to rent to people they know at a small discount as part of the 70 days, for example if they are deducting the fees that a listings website would normally charge for a letting via their platform. 

‘It should not prevent the owner offering a reasonable discount to family on friends if, for example, they can avoid the normal commission otherwise payable to the sites advertising their property,’ he says.    

What are the rules outside of England?

Wales has already had similar rules for holiday lets in place since 2010, and the new legislation will bring England in line with those.

The Scottish government is also set to introduce a requirement that holiday lets are rented for 70 days and available for 140 days in a given year, following a consultation called the Barclay Review. 

These rules are set to come into force from 1 April 2022. 

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

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Man admits to abduction of four-year-old Australian Cleo Smith

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A man has pleaded guilty to abducting a four-year-old girl from her family’s camping tent on Australia’s west coast last year.

Police found the girl, Cleo Smith, alone in a house in Carnavon, a town of 5,000 people, 18 days after she went missing last October.

Terence Darrell Kelly (36) admitted to the abduction during a brief court appearance in Carnarvon on Monday in a video link from a Perth prison, 900 km to the south.

He faces a potential sentence of up to 20 years in prison on a conviction of forcibly taking a child aged under 16. He will next appear in a Western Australian state District Court in Perth on March 20.

Kelly has not entered a plea to other criminal charges he faces, including assaulting a public officer. Those charges have been adjourned to a later date. – AP

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