agricultural developments

Could PDR changes turn generations of farmers into 'property speculators'?

Two weeks ago, housing minister Dominic Raab announced changes to permitted development rights (PDR) for agricultural buildings and introduced additional options to convert such properties into family homes.


These PDR changes will allow for up to five new homes to be converted from existing agricultural buildings on a farm, rather than the current maximum of three.

However, one development finance lender claimed that people needed to be mindful of these changes turning generations of farmers into “property speculators”.

Could we see a rise in agricultural permitted developments?

Robert Suss, director at UK Agricultural Finance, said: “The opportunity for farmers is to take advantage of the change in permitted development rights allowing up to five new homes [to] be created from existing agricultural buildings on a farm.

“UK Agricultural Finance … believes this will provide increasing opportunities for brokers to assist farmers to raise much-needed development finance secured against agricultural land and property.”

Paul Turton, head of sales of development finance at United Trust Bank, added: “The move is designed to encourage the creation of more affordable housing; five smaller dwellings presumably being lower priced than three larger ones, yet still being profitable for the developer.

“In suitable schemes, this could see an increase of up to 40% in absolute numbers of new homes delivered within agricultural property.

“However, this is a niche area.

“There are a few hundred farm building-to-residential conversions per year at best, and many of those already completed will have been the easier and more profitable ones.”

The changes will also see the size limit of new agricultural buildings on larger farms increase from 465 sq m to 1,000 sq m.

“The geographical location of some potential sites will render some of them uneconomic, even with higher densities allowed,” continued Paul.

“The dilapidated nature of many farm buildings can often mean that new build is the only viable option. 

“As such, a policy around ‘new-build’ PDR within the envelope of an existing agricultural building would be more helpful in bringing forward schemes without the requirement of a full planning consent.”

Ros Andrews, planning specialist and partner at Harrison Clark Rickerbys, said: “The changes will hopefully give landowners more opportunity to provide good-quality conversions through PDR.”

Michael Dean, principal at Avamore Capital, added: “…There will be a substantial increase in agricultural PD schemes as many farmers barely eke out a living, and anything that can generate revenue on farmland is generally taken advantage of (for example, renewable energy projects such as wind turbines and solar PV etc).”

Nonetheless, Michael’s declaration came with a warning regarding “the law of unintended consequences”.

“The cost of agricultural land has risen sharply in recent years and this is only going to increase the value of farmland,” he added.

“Farmers should be concentrating on working the land effectively, we need to be mindful of these changes turning generations of farmers into property speculators.

“However, on the positive side, if the changes make farms more viable, then that is to be welcomed.

Going further

“We would urge Mr Raab to put some real focus on tackling the issues preventing widespread housebuilding on the scale necessary to address the UK’s housing shortage; that of overhauling the underinvested planning system,” explained Paul.

Michael continued: “In terms of where they could have improved the measures, PDR change could/should have allowed more units and more square metres of total developable area.”

Ros added: “I would have liked to have seen the practical issues with the previous permitted development regime addressed, including the limitations on carrying out necessary ancillary works to make barn conversions a viable home, such as access roads.”

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