Occupancy restrictions come under fire

Occupancy restrictions come under fire

A home-owner who claims he has become a “prisoner” because of difficulties selling his £900,000 property over the past four years has challenged a planning restriction.

A planning appeal, made by homeowner David Stone, is challenging an occupancy restriction on a Cumbria property valued at £899,950, which was originally added to the Rightmove website on 13 April 2011, that states it must be occupied by a “local person”.

The appeal, seen by Financial Adviser, claimed the restriction, which focused on people already living or working in the area, and falls under the remit of the Lake District National Park authority, did not comply with national policy or EU law.

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According to the appeal, this meant the restriction was unlawful and did not serve a useful purpose.

The appeal also referred to the 51-page document Circular 11/95: Use of Conditions in Planning Permission, published by the department for communities and local government on 20 July 1995, warning that such restrictions could discourage house-builders from providing homes, deter building societies from providing mortgage finance and impose hardship on home-owners needing to sell.

The appeal added: “The applicant has struggled to sell the dwelling; he has become a prisoner so it is causing hardship.”

Under section 106 of the Town and Country Planning Act 1990, anyone interested in the area of a local planning authority may enter into an obligation which could, for example, restrict the development or use of the land in a specified way or require certain operations or activities to be carried out there.

Planning obligations are commonly used to secure the building of affordable housing, and can later apply to the owner of a property. However, Evan Owen, an IFA advocate who has challenged such restrictions in the past, warned they were having national consequences.

He said: “The UK economy has been dragged down by all this planning rigmarole. We are imprisoning people in their houses.”

In Devon, Trevor Branton, financial planning consultant for Clearwater Financial Planning, said he has struggled to arrange a mortgage because of a section 106 notice. He claimed that lenders had no interest in lending on affected properties because of the difficulty selling them.

Leanne Borthwick, a mortgage adviser for Devon-based Dartmoor Financial, also criticised the effect of restrictions, calling for them to be loosened.

Meanwhile Ian Pasea, director for London-based Mortgages Expert, claimed that if people were to become “prisoners” in their properties – including those who have been unable to remortgage under the much stricter MMR criteria – this could prompt a complaints backlash.

He said: “If there is no plan to assist these borrowers we will have a situation like PPI, where many people may claim that they were mis-sold a mortgage.”

Right to reply

A Lake District National Park spokesman said similar challenges had been made in the past, all unsuccessfully.