A new survey of more than 500 UK property investors, carried out by SearchLand, has shed light on the key challenges they face in their search for potential investment opportunities.
The survey found that 25% have bought a property in the past with a view to carrying out an extension or conversion, only to then be denied planning permission to do so. Meanwhile, 40% said the viability of obtaining planning permission is a major stumbling block when searching for a property investment.
SearchLand’s own data revealed that 24% of applications for new build residential schemes of one or more units were refused over the last five years.
Despite this, the survey found that 44% intend to invest in more properties or plots of land in the coming year, while 31% are considering commercial and semi-commercial properties that could be converted into residential premises
The PropTech startup commissioned an independent survey among 512 UK investors, all of whom own two or more properties in the UK, amid reports that the government has paused its controversial proposed planning reforms.
Its research revealed that UK property investors spend, on average, 23 days searching for and researching potential options before enquiring about a potential property investment.
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.
He added that 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’.
Gibbs continued: “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.”