The government’s new permitted development rights (PDR) have opened up a swathe of potential opportunities for developers to repurpose significant amounts of our failing high streets.

However, there are many rules for property professionals to fathom and new limitations may affect the scope for change of use. For example, buildings must be under 1,500 sq m (16,145 sq ft), meaning that larger office and retail spaces will still be subject to the usual planning process, including Section 106 requirements.

In addition, buildings must have been vacant for three months prior to application, which not only creates income and empty rates tax considerations, but makes it increasingly difficult to plan ahead, and some London boroughs have tried to wrestle back local planning control by issuing Article 4 directions.

The approval process, whether planning permission is required or not, is highly unpredictable, making funding a project even more challenging.

Since the new rules came in, many of our clients are in situations where they no longer have the right to permitted development and therefore need funding over a longer-term and for an unconsented site.

Given the natural diversity of property loans and risk factors such as uncertain exit dates and values, traditional lenders do not lend against sites without planning permission, making this very much the domain of a specialist lender able to evaluate key factors to underpin the loan, such as the site location, likelihood of consent, any potential build or conversion difficulties and making sure there’s a solid exit strategy with fall-back scenarios.

We have lent £65m since our inception last spring and the majority of these loans have been transactions for schemes without planning consent.

The new rules offer significant scope for creativity, breathing new life into high streets and meeting housing needs. Flexible and specialist financiers are another crucial part of the process.

Daniel Benton, director and Co-founder, GRE Finance