Legal update | Reach for the skies

Legal update | Reach for the skies

Change is clearly required if we are going to solve the ongoing housing crisis in the UK, and embracing alternative methods of development, such as airspace development, will be a major step, says Winckworth Sherwood’s Deborah Rowntree.

Airspace development involves building units offsite using modular construction and then installing them on top of existing residential, commercial or retail properties. An innovator in this sphere, Apex Airspace recently received just under £20m of funding from the GLA and Homes England representing a welcome further emphasis from all levels of government on innovative methods of housing delivery.

Apex have estimated that there is space on top of existing buildings for 180,000 new homes in London alone, which would represent 42% of the need identified by the London Plan.

One of the major benefits for housing associations of airspace development is that it means affordable housing can be developed on existing housing stock providing opportunities to maximise their existing assets and to increase the value of existing buildings in the process. As the units are built offsite, development is done with minimum disruption to existing residents. Modular is one of the most exciting innovations across property and is favoured by government as one of the keys to addressing delivery shortages and improving efficiency.

The result is precision-engineered affordable homes, built on top of existing developments in ready-made communities. And by building on existing developments, homes are delivered in areas which already contain the necessary infrastructure such as schools, hospitals and transport links for people to move into established neighbourhoods straightaway.

If we are going to meet housing targets, housing associations need to be ambitious. However, there are undoubtedly challenges as airspace development continues to grow.

Overcoming the challenges
Identifying suitable buildings for adaptation is typically the first hurdle. While there is great potential to build upwards, finding the right base can be an intricate process. For this reason, strategic partnerships are crucial. Housing associations need to team up with specialist developers who bring the necessary expertise to navigate this new form of development.

Another challenge is that bespoke financing arrangements and development documents are required for airspace development, as it is not adequately covered by standard documentation. Also, when we acted for Apex on the Homes England funding, we were involved in extensive negotiations with existing freeholders and leaseholders and had to consider planning impacts on rights to light. Further, there is the ongoing challenge of convincing lenders and mortgage providers to accept modular built homes as security.

However, as more rooftop homes are built and modular construction becomes more widely used, the potential of airspace development to help housing associations build affordable housing will become more and more evident.

Every suitable property in the country represents an opportunity, and in the context of a national housing shortage, housing associations should give serious consideration to this method of providing new affordable homes.

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