Planning policy is on board, housing secretary Robert Jenrick is on board — and we have increasingly advanced construction techniques at our disposal. There is a clear appetite to build upwards as a solution to providing housing in dense areas. However, for something to succeed, you need all parts working in unison and there remains a key hurdle: funding, both for developers and buyers.
The majority of airspace developments are delivered using timber-frame construction, a technique that is increasingly being used to build homes of all shapes and sizes, from airspace extensions — where its light weight makes it ideal for building on top of an existing structure — to detached new-build family homes. The government and property industry as a whole has been extremely vocal in promoting modern methods of construction (MMC), yet despite this, overly cautious credit committees remain reluctant to fund such projects as they don’t understand them — an issue we are facing at a site in Bermondsey, which recently gained planning permission. They need to move with the times and make it their policy to understand and support the creation of these developments.
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Meanwhile, at the other end of the spectrum, some mortgage applicants — including first-time buyers desperate to get on to the ladder — are being turned away by high street lenders on the grounds that rooftop apartments are of ‘non-standard construction’. This was the case at a recent airspace development we delivered in Putney, The View, where a number of people were declined by high street lenders, including one which gave an apartment a concerning ‘nil’ valuation. This, despite the property having full building regulations compliance as well as a structural warranty from Build-Zone.
This could have far-reaching ramifications, with buyers either forced to settle for significantly more expensive specialist finance — the last thing a first-time buyer wants — or give up on the home in question and reconsider their options. This issue is made worse by the fact that most lenders have exposure limits. They will not lend on more than 25–50% of units in a block (including the existing apartments below). This adds a further constraint, making the pool of lenders even smaller for new airspace apartments.
I call for mortgage lenders and the Council of Mortgage Lenders (CML) to catch up and get on board, or else we face a situation where there is high-quality new stock coming to market that is unsellable. This is a travesty given the current housing situation we face.
So, with clear appetite from developers and government to build upwards — and buyers queuing up to get on to the ladder — we now need a green light from lenders at both ends of the development cycle to help us move forwards with rooftop development.