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(No) Light at the end of the tunnel for the Pinnacle?
Real Insights - Property Update

Real Insights - Property Update

Author
Daniel Farrand
Date
29 April 2016

Another barrier to the long-stalled development at 22 Bishopsgate was removed this month when the City Corporation resolved in principle to use its statutory powers to override rights of light.


(No) Light at the end of the tunnel for the Pinnacle?

Another barrier to the long-stalled development at 22 Bishopsgate was removed this month when the City Corporation resolved in principle to use its statutory powers to override rights of light. The site, originally known as The Pinnacle, has experienced a number of difficulties since obtaining planning permission in 2005.

Last November the City Corporation resolved to grant permission on a revised scheme, but one which is likely to have a greater impact on light for surrounding properties. The developer and the Corporation are keen to see this site finally developed and delivering office space by 2018/19. The sheer number of potential rights of light claims threatens that timetable.

The power under section 237 of the Town and Country Planning Act 1990 can resolve the issue. It converts a right over land into a compensation claim, allowing the development to proceed immediately and with compensation negotiations to follow.

The developer will continue to undertake negotiations with affected owners against the backdrop of this resolution. Crucially, however, it acts as a fall-back against the spectre of an injunction.

To use the power, the developer will have to transfer the legal interest in the property to the City Corporation, followed by sale or leaseback. The developer will have to indemnify the Corporation for the compensation which will be payable.

The City Corporation's committee report considered the potential extent of rights affected and balanced those against the public benefit of rights from the development. The City also considered whether the same public benefits could be obtained from a less intrusive form of development.

Given the importance of rights of light, why doesn't everyone do this? It is fair to say that aside from the City, most councils are either unfamiliar with the process or politically uncomfortable with using it to benefit a single private developer over the interests of other land owners. It is certainly true that there are many hoops to be jumped through before use of the power is legitimate.

Despite this, section 237 remains a powerful tool in the armoury of councils to ensure development happens. Its use to benefit a single private developer over the interests of other landowners will always remain a source of tension; but it is also used by any authority that compulsorily purchases land or uses its own surplus land for development.

At present the section 237 power can be exercised only by local authorities and certain regeneration agencies. The Housing and Planning Bill will extend this to other bodies including various utility companies and statutory undertakers. The clear message is that section 237 is here to stay.