A quarter of UK property investors have seen their strategies falter as a result of planning permission rejections, new research from SearchLand has revealed.
The proptech startup commissioned an independent survey among 512 UK investors, all of whom own two or more properties in the UK.
It found that 25% have bought a property in the past with a view to carrying out an extension or conversion only to be denied planning permission to do so.
Two fifths (40%) of investors said the viability of obtaining planning permission was a major stumbling block when searching for a property investment.
SearchLand’s own data showed nearly a quarter (24%) of applications for residential schemes of one or more units were refused over the last five years (SearchLand’s data is based on 175,413 planning applications for residential schemes submitted between 15/09/2016 to 15/09/2021).
This comes amid reports that the Government has paused its proposed planning reforms.
The research revealed UK property investors spend on average 23 days searching for and researching potential options before enquiring about a potential property investment.
SearchLand’s research revealed that almost half (44%) of UK property investors intend to invest in more properties or plots of land in the coming year.
Almost a third (31%) of respondents said they are currently considering investing in commercial and semi-commercial properties that could be converted in residential premises.
Hugh Gibbs, co-founder of SearchLand, said:
“Our research shows just how big of a hurdle planning permission can be for investors, with over a quarter making purchases with the express view of carrying out works to convert or extend the property, only to be denied permission.
The findings are hard evidence of the opaque nature of the planning system and are particularly concerning given the Government’s recent U-turn on its proposed reforms.
The viability of obtaining planning permission is becoming a major stumbling block for investors – likewise developers – and the current refusal rate carries far-reaching implications for the businesses who we depend on the most to bring forward new homes.
At SearchLand our aim is to overcome these roadblocks by making data transparent.
Our site sourcing solution provides investors and developers with the information they need to be able to identify unviable sites before they go as far as a submission.
The study also highlights an interesting trend within the real estate sector, with many investors now looking to potentially convert commercial properties into residential premises.
The rise of remote working has lessened demand for office space, leaving many commercial buildings empty – understandably, investors are considering whether this could present them with new opportunities.”