Sky's the Limit: Your Guide to Airspace Development in the UK

By Georgia Galloway | Tuesday 16th January | 5 minute read

Airspace development, sometimes known as rooftop development, is the process of constructing new structures on top of existing buildings to use the available space.

This guide will provide you with a comprehensive overview of airspace development, including its benefits, challenges, processes and costs.

Airspace Development Finance

What is airspace in property development?

In property development, airspace refers to the three-dimensional space above a piece of land or a structure.

Can you buy air rights in the UK?

Yes, you can buy air rights in the UK. While there's no official definition or cost, technically, you own a vertical column of land. However, local planning laws, aviation rights, and factors like surrounding property heights and building codes influence the process.

The Civil Aviation Act of 1982 suggested that the height limit is 500-1,000 feet, but it's not strictly defined. To give context to this height, London's tallest landmark, The Shard, topped out at 310 metres (1,017 feet). Planning officers assess various factors like skyline, conservation, and heritage buildings. Some property owners use airspace for solar panels or satellites.

What is an airspace lease?

An airspace lease is a legal agreement granting a property owner the right to use the air space above their property for a specific period.

What is airspace development?

Airspace development is the process of developing the roof of a building. In the UK, it's most commonly used to add up to two new storeys of residential dwellings onto an existing structure, thus 'developing' the available 'air space'.

Changes in regulations that took effect in August 2020 meant a relaxation of the rules concerning developing rooftops, removing some of the red tape that blocked developers from obtaining the relevant planning permission.

  • Owners of purpose-built blocks of residential flats will have permitted development rights to add up to two extra storeys on top of their existing buildings. Part of the reason for this change was to stimulate economic growth and help solve the supply and demand challenges the housing industry faces, particularly in London.
  • With six different categories of Airspace Development under Permitted Development, you need to select the right strategy that will add the most value. Essentially, you can knock down old buildings to build new ones with additional floors or add stories to an existing building.

What are the benefits of airspace development?

Here are five potential benefits of airspace development include:

Increased property value and revenue: By building on top of existing structures, airspace development can help increase a property's value and generate additional income for the property owner.

Reduced service and building maintenance charges: As more people share the cost of maintenance and services, the overall cost is reduced for each individual.

Upgrades to existing buildings and modernisation: Airspace development can be used to upgrade existing buildings and improve their overall appearance.

More income for freeholders: By selling the airspace or developing it themselves, freeholders can generate additional income.

Value of individual leaseholder properties is increased: As the value of the property increases, so does the value of the individual leaseholder properties.

What are the challenges of airspace development?

Here are five potential challenges of airspace development include:

Securing planning permission: As airspace development is a relatively new concept, there can be some grey areas regarding planning permission. It is important to be aware of the specific regulations in your area and to work with a planning consultant to ensure that your project is compliant.

Structural support: A structural engineer will need to be consulted to determine if the existing building is structurally sound enough to support the additional weight of a new structure.

Access to the roof: Depending on the location of the building, it may be difficult or expensive to access the roof for construction purposes.

Obtaining the rights to use the airspace: In some cases, the freeholder of the building may not be willing to sell or lease the airspace, making it difficult to move forward with the project.

Dealing with existing tenants: If existing tenants are in the building, getting their input on the project and ensuring their rights are not violated is essential.

Planning permission for airspace development

Airspace development that meets certain criteria is now exempt from planning permission. However, if in doubt, an application must be formally submitted before any work is carried out.

In August 2020, new permitted development rights were introduced, making building upwards on existing buildings easier. The relaxation of development rights meant that property owners, including homeowners, could potentially add two storeys to a detached property without needing additional planning permission. 

The changes were introduced as part of the government's aim to stimulate economic growth and address the UK's housing shortage.

Here are the Six GPD Classes:

Class ZA:

  • Involves the demolition of existing commercial buildings or blocks of flats to make way for a new block of flats or detached house.
  • The new building must be within the footprint of the old one.
  • Up to two additional storeys can be added upwards.

Class A:

  • Permits the construction of two extra storeys of flats above detached blocks of flats.

Class AA:

  • Allows for the construction of flats in the airspace above detached commercial buildings.

Class AB:

  • Permits the construction of flats on terraced commercial buildings, including those with existing flats above them.
  • Allows for the addition of one storey of flats to single-storey rows of shops.
  • Up to two storeys can be added to rows of shops that already have flats or retail space above them.

Class AC:

  • Allows for the construction of flats in the airspace above terrace homes, including semi-detached houses.

Class AD:

  • Permits the construction of flats in the airspace above detached houses.

What is the main process of airspace development?

The process of airspace development is as follows:

  1. Research: Identify key sites that are suitable for airspace development. A structural engineer will often be required to calculate if an existing building can bear the new structural load.
  2. Permissions: Identify who owns the roof, as this is not always as straightforward as some might think in a building with multiple occupants. Hold consultations with existing tenants and neighbouring properties about the changes and whether they conflict with any part of their lease.
  3. Design: Liaise with architects and structural engineers to produce design drawings which combine safety, functionality and aesthetic appeal.
  4. Building: The main body of work can be off-site and then lifted into position using cranes and other hoisting machinery. Following this, the internal work and any fixtures and fittings can be completed.
  5. Completion: The new structure can be used for residential or commercial purposes once the build is complete.

How much does airspace development typically cost?

The typical cost of airspace development ranges from £2,000 to £7,000 per square metre, depending on the project's location and complexity.

The cost of airspace development can also be affected by the size of the development project, the type of structure being built, materials used, labour cost and the cost of obtaining planning permission.

What types of funding can be used for airspace development?

There are two primary avenues for financing an airspace development:

  • Development finance: Development finance is a type of funding based on the gross development value (GDV), which is the anticipated value of the completed project. Loans between £100k and £10m may be available, with funds released in stages over a fixed term.
  • Bridging finance: Bridging finance is a short-term loan that can cover the costs of an airspace development project while the borrower awaits permanent financing. Bridging loans are typically more expensive than long-term loans, but they can be a valuable option for developers who need access to capital quickly.

Final thoughts

Airspace development offers a viable solution to address the housing crisis in urban areas by using existing infrastructure and minimising urban sprawl.

The potential for airspace development is huge. By making use of existing flat roofs in London alone, there would be sufficient room for around 140,000 new homes. These new homes in London would be worth approximately £61bn, based on an average flat price of £437,400.

Although it may be possible to find spaces where building is feasible, there will still be access problems to overcome, and many older buildings will not be structurally suitable to an additional imposed load.

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