Air Rights Over Your Property: A Guide For Developers
Air rights govern how much of the ‘air’ above your property you own and could potentially develop on. Read this guide to understand what you can do with yours.
As a freehold property owner, you have air rights - meaning you can develop vertically above your property, but air rights come with restrictions and consideration. Keep reading to learn more about air rights.
When your property is successful but you need more space, many developers look towards nearby vacant lots and buildings to convert so they can have a single ‘project’ in one area.
All of those developers are missing out on a potentially lucrative avenue for those who can think more ambitiously. Those who can...look up to the sky.
We’re talking about property rights, in particular, air rights - which is a clearly defined element in the Capital Gains Tax guidance where land is defined as follows:
- All the buildings within a plot
- Any fixtures within the boundaries
- Minerals under the surface
- Any air space above the land
When building upwards, the issue is about air space and the right of passage for aircraft. You can’t stack skyscrapers together because it would impact navigable airspace - but considering you already technically own the plot and building vertically can be more cost-effective than trying to buy nearby land, just how high can you go?
What are air rights?
Air rights govern the rights to build upwards into vertical space - as you technically ‘own’ that airspace. In the US, air rights are far more defined than they are in the UK - with rulings based on the Latin phrase ‘for whoever owns the soil it is theirs up to Heaven and down to Hell.’ The invention of aircraft meant that the wording was amended to include ‘within the range of actual occupation’.
Air rights give property developers the right to build upwards, but also to sell their rights to adjacent plots if your own property has already encountered density restrictions in a city like Manhattan. In that busy city, air rights cost approximately $225 per square foot. This is very expensive and can often mean a developer pays the same for their air rights as they did to buy the building - but when the potential profit of building new upper floors is accounted for, the air rights are more than worth it.
In the UK we have no official air right definition or costings. Technically you own the land in a vertical column, but you are subject to planning considerations and other factors. There are aviation rights you have to bear in mind when deciding how high you want to build as this may impact the navigable airspace. This height limit is not strictly defined, though article 76 in the Civil Aviation Act 1982 suggests 500-1000 feet.
In practical situations, planning officers will make an assessment based on the height of surrounding properties, building codes, the skyline in your area and other unique elements such as conservation or heritage buildings. Property owners may also choose to use their airspace for solar panels or satellites.
Property sales in the UK have no inherent air rights - but the current direction of the UK government seems to indicate that planning consent for vertical construction may be easier to acquire...
Air rights and permitted development
In our recent guide to permitted development, we discussed how the government is prioritising the conversion of disused high street retail and hospitality units by simplifying the planning process in key areas. Permitted Development Rights have been extended to many of these vacant properties and present great opportunities for developers to purchase buildings and convert them into residential use.
While air rights typically mean seeking planning permission, a developer may be able to see opportunities by taking the government’s goals to reduce vacant retail and commercial properties into account alongside the opportunity to build vertically. As Housing Secretary Robert Jenrick seeks to rebuild high streets and allow for ‘building upwards’, planning consent may indeed prove easier to obtain for vertical development.
This direction was evident as early as 2019, when Homes England spent £9 million with an airspace developer to build London rooftop homes in Wanstead, Walthamstow, Putney, Wallington and Tooting.
Air rights and planning permission
While you might technically hold ‘air rights’ to your private property, you are still beholden to planning considerations. This means the impact your development may have on the overall skyline, how it will affect neighbouring buildings in terms of light ingress and other factors such as the overall aesthetic of the structure. Building Regulations also apply - especially if you’re considering building residential property which has strict light and space requirements.
Looking at example cases can help explain how to please planning officials whilst expanding your investment.
For instance, One Embankment Place is a commercial office building owned by PwC, which was constructed above Charing Cross station. It was built above the station and its lifts pass through it, but it was designed in a way that pleased planning officers and helped solve a need for more office space in a densely populated area where private land space is extremely limited.
Many commercial property owners in the retail space are now taking advantage of the air rights inherent to them by selling off vertical opportunities to developers. This could make for a great land ownership investment in busy city-centre locations that allows you to buy the right to build in prime areas that command high returns.
Air rights and development considerations
Building to take advantage of air rights means understanding the new advances in technology that have enabled vertical building in a more sustainable way. Green roof and flat roof systems make vertical design easier - and are more likely to allow you to meet certain expectations around floor space, light levels etc.
When securing finances to fund a building you plan on creating using air rights, you may struggle to find the right lender. Many lenders are hesitant to work on air right structures as they can be more technically challenging than other types of development. That often means that in order to secure finance, you’ll need to work with a contractor that the lender insists on.
If you already own private property and have a relationship with a lender, you’ll either need to use them for your air rights development or place the air rights under new ownership/a new lease so you can approach alternative lenders to those who own the existing building.
Finance for air rights development
If you’re considering building upwards, work with Rangewell and you’ll benefit from our existing relationship with lenders across the country - many of whom are specialists in air right development and property development in general. We’ll talk to you to assess your aims for the project and then we’ll refine your plans using our own extensive funding experience so that you have the best chance with lenders.
Air Rights Development FAQs
How high can I build using air rights?
There are no strictly defined allowances - you have to seek planning permission. Air rights apply to up to 500 feet, but how high you can actually build will depend on your local authority’s planning considerations.
Do I need to register for my air rights?
No - you automatically have them as a freehold property owner. Ownership rights to freeholds grant you any buildings, fixtures, mineral rights and air rights within the private land subject to conditions.
Is my building suitable for air rights development?
That depends entirely on how it is built and what opportunities for upward development it could support. A structural engineer can assess your building and see if it can be built on top of.
Can you buy air rights?
The UK market is not mature enough to answer this yet - but if the US is anything to go by, the sale of air rights, and the air rights market as a whole may become lucrative in future as available land becomes harder to purchase and developments in dense urban areas seek to utilise vertical space.