Introduction
One of my clients from last year was planning a major refurbishment of their existing home; a quintessential detached country cottage in the heart of the Sussex countryside with stables, views and a large annexed barn. The building was not listed but nonetheless subject to strict planning regulations about size and acceptable modifications given the location’s AONB (Area of Outstanding Natural Beauty) status. Reworking the interior for modern living would involve some considerable structural change, the dismantling and rebuild of a chimney, a basement under a small extension, all new building services, windows etc. but still, fundamentally a compromise on room layouts. And with financial implications of a refurbishment budget at circa £450,000 versus a complete replacement (subject to planning) of a new appropriately designed dwelling at £500,000. This is by no means an isolated case where project economics increasingly tip in favour of literally starting again, no matter how perverse the proposition may seem!
Popularity and main benefits
Finding an unencumbered green field site with an extant (current) consent is a tough job and, although the most dedicated amongst you will probably tease out some options over time, it can be a demoralising and very intense task. More likely you will find infill or back land plots, usually formally someone’s garden, and possibly with density restrictions why may not match your aspirations. The notion of replacing an existing dwelling is, therefore, a very real alternative and must account for a significant proportion of all annual self-build projects.
Part of the attraction is that residential use on the site is already established. Unless the building has been derelict for over 10 years, even if it’s currently empty, it should still retain its habitation status and, as such, there is pressure on the Local Authority to ensure that empty homes are brought back into service by whatever means possible. Older derelict stock would still constitute a brown field site (previously developed) but more complex planning procedures may be necessary to re-establish a residential connection. But the chances are that you will come across an existing house, currently being used as such, which could make way for something much more current and suitable by knocking it down and starting again.
Building in the countryside, i.e. outside of current town and recognised village settlements, requires a very special reason and is usually only secured by way of an agricultural tie or where there is justifiable need for the rural economy. However, replacing countryside properties on a straight swap basis provides opportunity where there are very few other building and development options.
From a tax perspective, replacement dwellings do not attract CIL, unless there is a net increase over 100m², and there should be no section 106 infrastructure obligations because there is no new residential demand being put on the borough. CIL, of course, should be a normal self-build concession under current regulations anyway.
From a management point of view the existing building may well provide an opportunity to continue living on the site whilst the build takes place, dependent on size, replacement footprint and overall site logistics. In addition, there could be project savings up for grabs by retaining the existing services (gas, electric, water, BT etc.), but sometimes these will need upgrading to provide better capacity. Similarly, there could be savings from an existing mains drainage connection as well as driveway bases and road frontage cross overs. All site-specific issues for appraisal on an individual basis.
Town planning issues
Local Authorities each have their own policies regarding replacement dwellings and these will differ dependent upon the site’s location. The Local Authority prepares its local plan based upon guidance from the NPPF (National Planning Policy Framework), its own measured housing need in terms of volume and tenure, and its attitude to architecture, character, culture, design and overall integration. Less obvious policy considerations might include an ambition to encourage entrepreneurs and new employers to a region whereby a more tolerant policy towards replacement dwellings and regeneration might be used as an incentive. So, every local plan must be read and relevant policies understood on a site-specific basis.
Most replacement dwelling proposals also seek to increase the buildings size which is fair enough given that many small and inadequate houses sit on large plots which could easily accommodate a generous increase. Policy might restrict size increases on a formulaic basis, i.e., no more than a 50% increase in the GIA (gross internal area) of the original dwelling. Or it may be a more subjective clause that refers to new building proposals being ‘on a scale and with design’ which matches and reflects the local vernacular, i.e. other neighbouring properties and architectural types. Like much in planning, therefore, applications can be successful (or not) based upon officer evaluation, consultee response and sometimes committee opinion.
Fundamental changes in design might raise a few eyebrows. However, the rather bland pastiche of yesteryear does seem to be successfully challenged on an increasing basis with more contemporary designs creeping in and leading the way, especially with individual one-off replacement dwellings. The pre-app service with the planners is a useful stage to gauge appetite and establish design parameters.
You’ll need to be absolutely clear about your curtilage and this is much more important in rural as opposed to urban settings where garden and field may not be defined properly. It’s possible, for example, that with bigger curtilages, a replacement dwelling proposal mighty allow the new house to be better positioned on a site. This might also enable you to continue living in one, whilst you build the other.
The most important thing to remember is not to demolish a thing before your consent is approved. If you clear the site too early you may just lose your basis upon which to negotiate.
Matters of caution
The most obvious mistake with replacement dwellings it to over pay for the site in the first place. Many dysfunctional properties are still valued on the basis of providing some useable accommodation and, no matter how poor, a house is a house. For this reason many folks will take the long view and accept that their acquisition cost may be at a premium but it is the only way to unlock a house to the design and standard that they want in an area of their choice.
Some folks take a punt and might acquire a site with the ambition to get two or three units from a single plot. Whichever way you look at it, this is straight forward property development and sometimes these sorts of gamble pay off and sometimes they don’t. The trick, if at all possible, is not to buy until you are certain about the outcome and this usually involves an option agreement and the possible sharing of any uplift with the vendor.
Demolition does not come for free. It might do if there is enough salvage in the existing materials (peg tiles, slate, stone lintels, old clay imperial bricks, stained glass etc., but generally there is just cost. To help mitigate this you might be able to use brick rubble as a base for your drive and possibly reuse some timber if you can be bothered to de-nail it and clean it up. And properly calculate the costs of exporting waste off site to landfill and make a sensible allowance for exceptional items like asbestos cement roofs which have compliance procedures attached.
Always take out the old foundations and then prepare for your new ones to be deeper whilst you compensate for some instability of the site where the old house stood. And if there was an old cellar, it will need to be properly filled with compacted layers.
You may have planned to reuse the drains only to find that they are inadequate and need wholescale replacement. Frequently new service supplies are required, especially water where you need to rely on your own metered supply from a main with adequate capacity. There are also some concessions when refurbishing an existing house in terms of Building Control; however, the moment the dwelling becomes a new replacement, all current regulations will apply. No bad thing but sometimes this catches people out regarding access and turning spaces for the fire brigade as just one example.
And finally, be warned that where houses get replaced with new fresh cotemporary alternatives, your neighbours may well consider the same in years to come which might mean successive building operations in and around your area for some time until the whole street is complete!
A 10-point appraisal checklist
- Acquisition or opening value. Be clear about the acquisition price to be paid and be sure about comparative values. Or, where you already own the site (as this could be your existing home), take professional advice to establish a base value now.
- Permitted development. Some properties will have unused permitted development opportunities. Exercising these now, before you commence design negotiations, may give you a bigger property for subsequent potential increases.
- Local precedent. Identify what has already been done in the neighbourhood. Sometimes an early pioneer might have established some principles which can be used to argue your position. Replacement dwellings can often be the start of wider overall regeneration.
- Pre-application discussions. Seek a formal ‘informal’ opinion from the planning department. This will help steer your thinking but you may need to get some sketches done first for this to have value.
- Schematic designs. Have some designs prepared based upon the pre-app guidance; the more detailed these are, the better.
- Valuations. Have these designs professionally valued to confirm the target uplift in the new finished property value.
- Detailed planning application. Submit and secure detailed consent. Do not demolish anything until this is approved in writing.
- Building control & detailed costings. Prepare your building control details including any structural engineering and have a detailed costing produced.
- Valuation Re-check valuations. Sometimes schemes will change as you secure formal consent. Be sure about end value versus build costs.
- Demolition & build programme. Only when you’re satisfied with the financial equation, should you start the demolition and build programme.
Written and published in January 2017
