Have you ever heard the term “airspace development?” Lately, in the property development industry, this term has been coming up more and more – but what exactly does the term “airspace development” mean?
In a simple manner, the term “airspace development” means that new buildings are built on top of existing structures. It is becoming a major trend in the UK, especially in urban areas, since ground area is becoming more and more limited.
Of course, this type of property development doesn’t come without its challenges. There are many boxes to check regarding the legal status and fine details that need to be solved. It is not as simple as just building a few flats on top of another building. Planning permissions need to be met, air rights must be secured, and a strategy must be implemented to make sure that the original structure can hold the weight of the airspace.
We Took a Little Trip to Old Kent Road…
Our team recently paid a visit to a site on Old Kent Road, where the developer is adding nine new flats above an existing building – a great example of airspace development. Think 7 x 2-beds, 2 x 1-beds and a studio with a view (once the scaffolding’s down).
Why were we there? Well, airspace deals can get a bit fiddly and this one came with its challenges: party walls, multiple freeholds, and overage issues they needed to navigate.
After discussions with our experienced underwriting team, we knew we could provide solutions to not only bypass every obstacle but to address various other factors that had the potential to derail the project for the client too.
This included negotiating 15 party walls and conducting surveys with the top-floor flat owners located directly next to a local pub. A complex overage agreement was also put in place to address overage issues.
Once all that was sorted, we quickly provided a development finance loan of £1.7 million against a Gross Development Value (GDV) of £3.4 million, enabling the developer to begin the project.
Airspace: Not Always Simple, But Makes a Lot of Sense
Sure, airspace development can be a bit of a headache, but it also comes with some pretty major upsides.
In urban areas, especially London, people are always on the hunt to find a place to live, building upwards just makes sense. Airspace allows property developers to make better use of the land – turning rooftops into much-needed homes and keeping things that are bit more sustainable
These types of projects don’t just address the lack of affordable housing – they breathe new life into tired rooftops and overlooked corners of the city and they turn underused space into homes people actually want to live in. Homes close to the action, with parks, cafés, and transport links just a short stroll away.
We love supporting projects that challenge the norm and rethink how we live. It’s about making better use of what’s already there – and building upwards, not just outwards.
Contact Magnet Capital
We get that no two property developments are the same – especially when it comes to airspace. There are legal hoops to jump through, technical quirks to tackle, and a whole lot of planning in between. That’s why we work closely with our clients from the very beginning, offering honest advice, flagging potential pitfalls, and helping set the project up for success.
With demand for housing on the rise and space at a premium, especially in towns and cities, we expect to see more developers looking up for answers. And when they do, we’ll be here.
If airspace development is something you’re looking to explore, call us on 020 8075 3255 or fill in our online form. We’re always up for turning rooftops into something remarkable.
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