It is an all too common scenario: a landowner enjoys what he believes is a right of way over neighbouring land only to subsequently find that there is no written document evidencing his right. In such a situation all is not lost, as it may be possible to establish a right under the law relating to “prescription”.

A right acquired by prescription is a right established by the long use or enjoyment of that right. This is explored in more detail below.

Every application of the law relating to prescription will turn on its particular facts; however, a right can often be established where the following two key facts can be demonstrated:

1. 20 years’ continuous use of the right of way

The right must have been used for a period of at least 20 years, for the same use, and there must have been no interruptions in that use. This continuous use requirement does not require the right to be exercised with any specific frequency but it is important that there are no significant periods where the right is not exercised and which interrupt the 20 year period.

Commonly 20 years’ continuous use will have occurred immediately prior to the landowner seeking to establish the right of way. However, if it is clear that the right has been exercised for the requisite 20 year period but not recently, then this is not necessarily fatal to the landowner’s claim. The failure to use a right of way once it has been established will not extinguish that right, and in these circumstances the doctrine of “lost modern grant” will apply a presumption that the right was historically created by deed but that the document has now been lost. This is a particularly valuable presumption – as it can apply regardless of evidence indicating whether or not such a deed did in fact exist.

2. The use must have been as of right – “without force, without secrecy, and without permission”

The right must have been exercised by the landowner as if there was a formal right of way enjoyed for the benefit of his land (the dominant land) over the neighbouring land (the servient land). It is also important that the servient landowner knew about the exercise of the right of way and took no steps to prevent it when he could otherwise have done so. This submission by the servient landowner to the right of way will be more easily established where the servient landowner occupies the servient land himself, and in contrast will be difficult to establish where the land is let to a third party and has been for the duration of the exercise of the right.

Supporting Evidence

Before the Land Registry will register the right of way, they will need to be satisfied that a right has in fact been acquired. Supporting evidence and information will therefore play an important role in establishing that the elements necessary for claiming a right of way by prescription are present. Examples of information and evidence likely to be particularly helpful are:

• Statutory declarations made by people with personal knowledge of the use of the right of way and the duration of that use;
• Ownership information in respect of the servient land;
• Plans showing the route of the right of way

The High Court has recently quashed a planning permission for a single wind turbine.

In this case the developer applied for planning permission for the wind turbine. The wind turbine was a single community scale 500KW turbine on agricultural land. The turbine was intended to meet local energy demands and a similar turbine had been installed by the developer on a nearby site. As part of the development the developer offered a package of community benefits including an annual contribution of 4% of turnover. This was not an insignificant amount as the donation was expected to be in the region of £15,000 – £25,000 per year over a 25 year period (the total benefit to the community was estimated to be £500,000 – £1,000,000 over the life of the project).

Planning permission was granted for the wind turbine in September 2015 and the Local Planning Authority (“LPA”) considered the community donation to be a “material consideration”. This decision was challenged by the claimant, Mr Wright, on the basis that the LPA had unlawfully taken the donation in to consideration.

An LPA must have regard to “material considerations” when considering planning permission applications. Material considerations are widely defined as considerations which are relevant to the planning decision in question and will entirely depend on the factual circumstances. The Courts have been asked to decide what is and what is not a “material consideration” on numerous previous occasions.

In this case the Court confirmed that the financial contribution was not material. Following the previous case of Newbury District Council v Secretary of State for the Environment [1981] AC 578, the donation should be for a planning purpose and relate to the proposed development. In this case the donation was intended to be locally administered by the community and applied to community initiatives. The Court decided that there was not a sufficient link between the application of the fund and the wind turbine, regardless of the operation of a similar fund on a nearby development. Whilst defibrillators and proving play groups are commendable contributions, the Court would expect to see something linked to the planning permission. For example when developers build new houses, they provide contributions towards education facilities or employment initiatives.

The Court also followed the case of Sainsbury’s Supermarkets Ltd v Wolverhampton City Council and another [2010] UKSC 20 which requires any off-site financial benefit to be connected with the development – in this case there was no real connection between the turbine and the community benefit fund. The Court considered the contribution to be “untargeted” and “not designed to address a planning purpose”.

So what does this mean for developers? It is unlikely that this case will see the end of community contributions. However, this case serves as a reminder that, if developers want their contributions to be considered in their favour as part of a planning application, the contribution should be related to the land in question and serve a planning purpose.

For more information about any of the issues raised in the article please contact Mark Howard, head of Planning and Environment at Michelmores on mark.howard@michelmores.com

Developers and operators will know the care that has to be exercised in tax structuring retirement housing and care provision. VAT is an area which needs special attention.

Help is at hand this week with a ruling by the First Tier Tribunal upholding a taxpayer’s appeal against a VAT self-supply charge.

The Law

The issue at stake here concerned zero rating. The sale or lease of a building will be rated zero, standard or exempt, depending on the circumstances. Zero rating means that the developer can sell the building without charging VAT on the sale but, crucially, can recover VAT that he has paid out.

Zero rating for residential property will depend on whether the building is a dwelling – in which case the rating is based on design – or whether it is intended for a ‘relevant residential purpose’ – in which case the rating is dependent on use. This distinction will always be important for care homes and sometimes for retirement housing.

In the latter case, as one might expect, a change of use can trigger a charge to VAT. The legislation is contained in schedule 10 to the VAT Act 1994. The dispute concerned the meaning of that legislation. In the words of the Revenue & Customs Brief, Issue 49. 6/12/2012:

‘The current provisions are complex and… produce uneven tax consequences’.

The Facts

A care home at Huntly in Scotland was built by Faskally Care Home Group Ltd (‘FC’), a subsidiary of Balhousie Holdings Ltd (‘BH’). For VAT reasons FC was not in the same tax group as BH and BH’s other subsidiaries. Following the development in 2010 it was decided to finance Huntly and two other homes owned by another BH subsidiary, Balhousie Care Ltd (‘BC’), by way of a sale and lease back.

The Huntly property was sold by FC to BC; BC then in 2013 sold all three properties to Target Healthcare REIT (‘Target’) and immediately took back long leases of all three properties.

The first transaction – the sale of Huntly by FC to BC – was treated as a VAT zero rated supply of a major interest in residential property. The relevant self-certification that the property was to be used for residential purposes was produced. So that transfer was zero rated.

The Dispute

The issue arose over what happened next to the Huntly property – the sale by BC to Target and the lease back from Target to BC. HMRC referred to its own VAT Guidance Note 708 which takes the view that where a person who is in receipt of zero rated supplies in respect of a building intended for residential purposes (BC in this case) disposes of their entire interest in those premises within 10 years, then that person must account for VAT on the original supply, as output tax.

In this case the amount of tax was assessed as £801,492. Added to this was interest of £24,308.26. This amount was described by Grant Thornton as a ‘potentially business ending issue’. The stakes could not have been higher.

The argument turned on an interpretation of paragraphs 35 to 37 of Schedule 10 of the Value Added Tax Act of 1994 and (i) whether a sale and lease back separated by a scintilla of time amounted to a disposal of the entire interest and (ii) whether such a disposal had to be accompanied by a change of use. Paragraph 35 is helpfully headed ‘Residential and Charitable Buildings: Change of Use etc.’ which would seem to offer a clue as to Parliament’s intentions.

HMRC referred to its own VAT guidance Note 708 which takes the view that as regards buildings completed after 1 March 2011, the taxable charge arises on a disposal of the building, regardless of whether or not it continues to be used for a qualifying purpose – residential in this case. They also argued that the sale was a distinct transaction from the lease back for tax purposes, notwithstanding they were linked contractually, and one could not happen without the other. For a scintilla of time BC had disposed of its entire interest.

The Decision

The outcome, as indicated at the outset, was in favour of the tax payer which clearly had the sympathy of Court. The Tribunal took a robust and purposive approach in its interpretation: it did not accept that the entire interest was disposed of by BC, but rather that the sale and lease back was a composite transaction forming a commercial unity. And it added that the legislation is clearly intended to deal with the issue of ensuring that use for the relevant residential purposes continues.

Commentary

This decision appears at first sight to be a victory for common sense. However the background and the questions it raises have to be considered. The law changed as of 1 March 2011 – the sale and lease back took place in 2013, and HMRC’s harsh views of the relevant law were well known 2 years before the transaction took place. Many operators in the sectors covered by ‘relevant residential use’ law e.g. care homes and student accommodation had structured their developments so as to prevent such a fact pattern ever arising and indeed banks at the time were lending according to whether the borrowers were at risk of such a self-supply charge. The taxpayers should not have been surprised that they were met with the response of HMRC.

The second question with a decision such as this is where will it end? The Tribunal held that the sale and lease back did not constitute a disposal of the entire interest of the taxpayer. The same could be said of a taxpayer having a contrived buy back option in any sale agreement – HMRC made this point but the Tribunal failed to address it. This is fertile territory for an appeal by HMRC.

The Moral

Like all good stories this one has a moral. For nearly three years the Balhousie Group has laboured under the shadow of a business-ending issue which will have taken an enormous amount of management time, expensive legal fees and, no doubt, an emotional toll. With litigation like this the outcome is never certain, and with the prospect of an appeal the taxpayer’s troubles may not yet be over.

So the moral here: Beware VAT traps, and take tax advice early.

Following the decision of the Supreme Court back in March 2016 in PMS International Group plc v Magmatic Limited,(‘the Decision’) in which it was held that the ‘Kiddee Case’ did not infringe the design rights of the ‘Trunki’ case, the UK Intellectual Property Office (‘UKIPO’) has now published further guidance on registered design applications.

Traditionally designers have chosen to only register the shape of their designs on the basis that surface decoration or other visual features will be ignored when determining infringement and a wider scope of protection is therefore afforded.

As a result of the Decision, there is now more emphasis on the distinction between designs protecting shape alone and those protecting other features as well as the shape. Applicants should therefore be careful when selecting the form of representation for their designs (i.e. pencil drawings, line drawings, photographs, CAD drawings) to ensure that they do accurately reflect what the design is intended to protect. The UKIPO recommends that designers seek advice before submitting an application.

The UKIPO acknowledges the tension between previous case law affirming that basic line drawings are likely to be interpreted as protecting shape only designs (Procter and Gamble Co. v Reckitt Benckiser (UK) Ltd) and the Decision, which held that the absence of decoration can be a positive feature of a registered design, i.e. a plain undecorated surface intended for protection in its own right.

The UKIPO advises that when seeking to protect designs for shape only, designers use simple line drawings.  The UKIPO does not discourage the use of CAD drawings, but notes that tonal differentiation can result in the design being assessed as a registration for both shape and other features and the scope of the protection obtained therefore being limited.

Clearly, Magmatic Ltd is a case in point here, as it was not able to benefit from the intended protection of its registered ‘Trunki’ design against PMS International Group plc.

To define and clarify the intended protection, the UKIPO encourages use of disclaimers and/or limitations by designers when submitting applications. These disclaimers/limitations can be provided in graphical or written form, for example ‘protection is sought for the shape and contours alone’. Further guidance on disclaimers/limitations is available on the UKIPO website.

For designers looking to protect several different aspects of their designs, the UKIPO highlights the availability of the ‘multiple application’ route as a simple and cost-effective means of submitting different forms of representations in one action.

The UKIPO guidance is a further reminder that the exact interpretation of a registered design by the Courts is fact-specific.

Designers must take great care when selecting the method of representation of their registered design applications to ensure that the required protection is obtained.

For more information please contact Charlotte Bolton, Associate on charlotte.bolton@michelmores.com

The Corporate Team at Michelmores comprising Roger Fink, Alex Watson and Edwin Richards is delighted to announce that it advised a management team combining existing operational expertise with external sector talent and led by new CEO David Tracey. David Tracey joined incumbents Scott McGinley, COO and Scott Merrick, IT Director and buy-in managers: Nick Frogbrook as CFO and Stewart Oades as Chairman.

Sovereign Capital, the UK private equity Buy & Build specialist, backed management’s acquisition of Dalepak with a significant investment and will work with the management team to develop the business further as it meets the increasing demand for its specialist services.

A family business founded in 1991, Dalepak offers customers a fully managed and bespoke, end-to-end solution for all of their logistic requirements. These include integrated warehouse solutions, contract packing, value added production services and carrier management. In the last three years, Dalepak’s revenue grew by 150 per cent. The business employs 265 staff which provide their services from over half a million square feet of warehousing space, across four sites in Northampton.

David Tracey commented:

“It was a pleasure to work with Michelmores on this deal.  They, with Argyll Partners and Dixon Wilson, were very helpful in guiding the management teams through a transaction executed within a tight timescale”.

Argyll Partners acted as financial advisers and Dixon Wilson as tax advisers on the deal.

For further information please contact our Corporate team.

A recent opinion of the Advocate General (AG) in GS Media BV v Sanoma Media Netherlands BV and others C-160/15 has indicated that a hyperlink to content freely available on an unrestricted third party website is not copyright infringement within Article 3(1) of the Copyright Directive (2001/29/EC) (the Directive), despite the content itself being used without the copyright holder’s consent.

The dispute considered by the AG concerned the use of a hyperlink by GS Media BV to a website showing photographs of a Dutch television personality without the consent of Sanoma Media Netherlands BV – the publisher of Playboy. The photos were posted illegally prior to the publication in Playboy magazine.

Two criteria have been established to determine if a copyright work has been unlawfully ‘communicated to the public’ online. There must be: (1) an act of communication of the work; and (2) it must be ‘communicated to a public’.

The AG did not consider that hyperlinks to protected content, which could be accessed without restriction on a third party website, fulfilled the criteria of being ‘made available to a public’, the hyperlink simply made access easier. However, if the use of the hyperlink was ‘indispensable’ to enable access, that would infringe copyright. This test of indispensability as part of the first criteria departs from the previous approach of the Court of Justice of the European Union (CJEU) in Nils Svensson and Others v Retriever Sverige AB C-466/12 (C-466/12) (Svensson) where ‘indispensability’ was considered under the second limb of the test i.e. was the content communicated to a public.

Although the AG viewed there to have been no infringement on the basis of no act of communication, he clarified that, if the photographs were freely available to the public on the third party website, hyperlinking to this content would not make them available to a new public and would not therefore constitute infringement (as set out in Svensson). The position it appears from both Svensson and the AG’s opinion would be different if the hyperlink enabled users to circumvent restrictions to access on third party websites.

Whilst the AG has encouraged the CJEU to apply an alternative approach to the controversial assessment in Svensson of what contributes ‘an act of communication’, the same outcome is likely to be achieved if the CJEU follows the AG’s guidance – hyperlinking does not fall within Article 3(1) of the Directive.

Practically, although the guidance will be welcomed by website operators and internet users, this will prevent copyright holders from taking action against website operators posting hyperlinks to their unlicensed, unauthorised content. This is no doubt highly frustrating where website operators can flagrantly promote and facilitate unauthorised use of copyright material.  Other remedies remain available against the third party website or the original publishing entity, but these may be more difficult to obtain. For example, in this case the identity of the original publisher was impossible to determine.

It will be interesting to see whether the CJEU does follow the AG’s opinion and if so, the practical effects flowing from the decision.

Read the AG’s opinion in full.

For more information please contact Charlotte Bolton, associate in the Commercial Disputes & Regulatory team on charlotte.bolton@michelmores.com or 01392 687745.

http://www.kier.co.uk/

Congratulations to EDF Energy Training Centre – Cannington, Somerset, winner of Heritage Project of the Year.

The EDF Energy Training Centre is a new training facility built to inspire innovation, creativity and interaction for all EDF Energy staff, business and education partners. The project involved the sensitive refurbishment of the historic site, including the Grade I listed Cannington Court dating from 1138, together with landscaping and car parking within the Cannington Conservation area. The site generates up to 50% of its energy requirements through site based ground-sourced heat pumps, radiant solar panels and solar voltaic panels.

Submitted by BDG architecture + design.

Here’s the shortlist in full:

• Churston Court Farm – Churston Ferrers, Devon. 
• Dean Clarke House – Exeter.  
• EDF Energy Training Centre – Cannington, Somerset.  
• Ocean Studios – Plymouth.  

The EU Trade Mark Regulation, (EU) 2015/2424, (‘the Regulation’) came into force on 23 March 2016. These reforms are intended to make the EU trade mark registration system faster, more cost-effective and more predictable for users.

The key changes are set out below:

• OHIM (the Office of Harmonisation of the Internal Market) will now be known as the European Union Intellectual Property Office (‘EUIPO’) and the Community trade mark (which offers a single application to potentially obtain protection across all EU member states) will be renamed the European Union trade mark (‘EUTM’). All trade marks registered or applied for as of 23 March 2016 will be known as EUTMs and EUTM applications respectively.
• Revision of associated fees payable to the EUIPO. The European Commission anticipates that this new fee structure will save businesses up to 37% on marks held longer than 10 years. Fees payable for opposition, invalidity or revocation proceedings and filing an appeal have all likewise been reduced. Up to date fees are now shown on the EUIPO website.
• The EUIPO’s interpretation of descriptions of goods and services has changed. The wording of trade mark class specifications are to be interpreted literally. For CTMs filed before 22 June 2012, the EUIPO are offering owners the opportunity, within 6 months of implementation, to clarify the scope of their specification and declare that their intention at the date of filing was to seek protection in respect of goods or services beyond those covered within the literal meaning of the relevant class heading. These must be identified clearly and precisely. Going forward, trade mark owners should be careful to ensure that all goods and services in respect of which the mark is/will be used are included within the class specifications filed to ensure adequate protection is obtained.
• Unless there is a clear agreement to the contrary, a business’s trade marks will now automatically be included in a transfer of that business.
• Defences to infringement now apply in relation to the use of a trade mark for reference purposes. The ‘own name’ defence is now only available to individuals and not businesses – the latter must therefore carry out appropriate searches prior to using their business name. Claimants in infringement proceedings can now require the owners of EUTMs to show prior use (or reasons for non-use) during the 5 year period prior to the commencement of proceedings.
• The rights of licensees across the EU have been harmonised. Licensees can only bring trade mark infringement proceedings if the trade mark owner consents although an exclusive licensee can bring an action if the owner fails to do so within an appropriate period after receiving notice from the licensee.
• The absolute ground for refusal/invalidity in relation to the nature of goods, technical result or substantial value has been extended to include “other characteristics” beyond shape. Additional grounds have also been included as absolute grounds for refusal, for example designations of origin.
• Use of a registered trade mark as a trading or company name is now a specific infringement.
• The transit or storage of goods through the EU, although not intended for the EU market, could now be an infringement of a EUTM if the goods or their packaging bear marks identical to or undistinguishable from the EUTM, registered for the same goods. However, if the trade mark owner is not entitled to prevent sale of the goods in the country where they are to be ultimately sold, the right to pursue the third party for trade mark infringement on this ground is likely to be lost.
• Trade mark owners can bring a claim of infringement to prohibit preparatory acts in relation to packaging and labelling where it is likely that the application of a trade mark will amount to an infringement of the trade mark owner’s rights.

Clearly the success in practice of the amendments implemented by the Regulation will be determined in time. However, the introduction of a more user-friendly, effective and cost-sensitive system is no doubt to be welcomed by both new and existing EUTM owners across Europe.

For more information please contact Charlotte Bolton, Solicitor in the Intellectual Property team at charlotte.bolton@michelmores.com

The Court of Appeal has given a nationally significant judgment on the correct interpretation of paragraph 49 of the National Planning Policy Framework (NPPF) in the case of Suffolk Coastal District Council –v- Hopkins Homes Limited and The Secretary of State for Communities and Local Government [2016] EWCA Civ 168.

As a reminder paragraph 49 states:

“Housing Applications should be considered in the context of the presumption in favour of sustainable development. Relevant policies for the supply of housing should not be considered up-to-date if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites.”

The correct interpretation of paragraph 49, and in particular what constitutes a “relevant policy” is a matter that has been put before the Court a number of times with mixed results. In granting permission to appeal the Judge at the first instance recognised that this was an area that required clarification from the Court in order to assist planning authorities and other interested parties in how the framework should be applied.

The Court directed itself that the true meaning of paragraph 49 should be “Faithful to the words of the policy, read in their full context and not in isolation from it”. On that basis, the meaning of “Relevant Policies” could be given three interpretations:

• narrow – to mean only policies that directly and positively concern housing provision;
• intermediate – meaning that some restrictive policies would qualify as relevant policies but others would not;
• wide – which would include both policies providing positively for the supply of new housing and other counterpart policies whose effect is to restrain the supply by restricting development in certain parts of the authority’s area.

After deliberation the Court settled upon applying the wider interpretation to the meaning of “relevant policies”.  This means that all relevant policies regarding the supply of housing contained in a planning authority’s policies will also be deemed to be out of date unless the local authority is able to demonstrate a five year supply of deliverable housing sites.

Examples of policies which could be determined to be out of date include policies for greenbelt land, policies for the general protection of countryside, policies for conserving landscape of Areas of Outstanding Natural Beauty and National Parks and policies for the conservation of wildlife or cultural heritage.

This planning decision is significant. It is likely to make a local planning authority’s task in protecting land more onerous unless it maintains a five year housing supply plan although it must be stressed this will always be tempered with the requirement for development to be sustainable.

For more information please contact Lucy Smallwood on lucy.smallwood@michelmores.com or 01392 687555

This article was first published in Private Client Adviser on 26 February 2016 and is reproduced by kind permission.

A civil partnership for heterosexual couples will not undermine the institution of marriage. It will stop people who do not believe in it from entering into one and developing a tick-box marriage.

A recent High Court decision has confirmed that heterosexual couples cannot enter into a civil partnership, unlike same-sex couples who have the option to either enter into a civil marriage or a civil partnership.

Rebecca Steinfield and Charles Kiedan’s argument, that this disparity between same-sex and opposite-sex couples was discriminatory, was rejected by the High Court. The court found that heterosexual couples were ‘not disadvantaged’ by the legal position as they were able to marry, affording them the same legal rights as a civil partnership.

Notwithstanding this decision and reasoning behind it, it is interesting to examine why it is such an issue for either side of the debate. Why is it so important for heterosexual couples to be able to form civil partnerships and equally, why has the government been so reluctant to make them available in this way?

The argument ‘for’ legislative change in this area is seemingly underpinned by the fact that many people do not want to associate themselves with the sexist or religious overtones associated with being married. Conversely, the main argument ‘against’ to date has been that it will in some way undermine the sacred institution of marriage, by creating something that could be seen to entail a lesser degree of commitment in comparison.

Leaving aside any exploration of whether civil partnerships are viewed as being or are actually somehow more flimsy and fragile than marriage, this supposed infallibility of marriage’s strength is fairly questionable. With an estimated 42 per cent of marriages ending in divorce, can it really be argued that it has an inherent stability we must preserve?

The law should reflect our society

Ultimately, a degree of relationship breakdown can be seen as an inevitable occurrence, no matter how much we wish it wasn’t. Making sure people have legal protection for when it does happen is therefore the crucial issue. If making civil partnerships an option available to heterosexual couples would encourage some of those people to afford themselves that protection, then it is a legislative change that should be adopted.

Furthermore, and as I have said before, I believe that people should be encouraged to take their commitment to a life together seriously, and arguably part of that is being able to give people the flexibility to choose how their commitment towards one another looks.

This surely will encourage people to consider the choice they are making, as opposed to seeing the progression of a relationship as a tick-box exercise; something I strongly feel is prevalent and intrinsically engrained within our society.

Undoubtedly, reform seems a perfect solution to those couples (gay or straight) who for ideological reasons or otherwise, wish to have their relationship legally recognised, but do not wish to be married.

As opposed to somehow undermining the institution of marriage, such change would arguably provide legal recognition of the fact that marriage is no longer viewed in the same way, society has moved on and as such, marriage has in a way undermined itself through the perpetuation of increasingly outdated notions many people simply do not buy into.

Civil partnerships do reflect and embody the notion of equality much more than marriage does. As such, legislative change would recognise a reality of modern day and specifically modern family life – something the law often struggles to do.

For more information please contact Pippa Allsop, Solicitor in the Family team on pippa.allsop@michelmores.com or 01392 687747.

The Government’s high profile Starter Homes programme is under scrutiny, and there are aspects which have been called into question.

The initiative

The Starter Homes initiative was launched in early 2015. Initially it took the form of an exception site planning policy that house builders should be able to develop under-used or unviable brownfield land as Starter Homes, provided the homes were offered at a 20% discount to first time buyers under the age of 40.

The introduction in the Housing and Planning Bill 2015-2016 of a general duty on all local planning authorities (LPAs) in England to promote the supply of Starter Homes means that the initiative is now far more significant.  It has switched from being a way of re-using redundant or problematic industrial and commercial sites, to becoming a product that will make its way onto every significant housing site in the country.

This has been followed by the Government’s key proposal, currently under consultation, to expand the National Planning Policy Framework (NPPF) definition of affordable housing, to encompass more options for renters and buyers, including products such as discount market sales or “innovative rent to buy housing”. Some of the new products may not be restricted by an “in perpetuity” or recycled subsidy requirement. The effect of these changes to the NPPF would be to bring Starter Homes within the planning definition of affordable housing.

Elements under scrutiny

A controversial element of the current proposals is that Starter Homes, which are required to be available at a 20% discount to first time buyers under 40, are proposed to be capable of being sold on at full market rates after five years. The Local Government Association (LGA), which represents local councils, is calling for the discounts to benefit future owners, rather than handing one group of current buyers a windfall at the expense of future generations.

Another key concern is that Starter Homes may be out of reach and unaffordable for a large proportion of those who are classified as needing affordable housing. The discounted prices will be capped at £450,000 in London and £250,000 elsewhere. In this regard analysis by Savills for the LGA indicates that discounted Starter Homes prices will be out of reach for all people in need of affordable housing in 220 council areas (67 per cent).

The 20% discount for new buyers would be funded by exempting developers from paying section 106 contributions towards affordable rented housing and Community Infrastructure Levy contributions. In its own analysis, the Government has suggested that should 100,000 Starter Homes be built through the planning system, between 56,000 and 71,000 social and affordable rented homes would not be built.

The LGA is urging the House of Lords to back amendments to the forthcoming Housing and Planning Bill allowing councils to have a mix of affordable homes based on local need, given that millions of people remain on the lists for social housing.

Going forward and impact on acquisition arrangements

The consultation process is ongoing and the scale and impact of these proposed changes is therefore under review. For sure, these changes would introduce a further unknown into the world of development risk, and unknowns are often addressed in price adjustment provisions. We are used to seeing price adjustments in land acquisition contracts linked to the overall level of affordable housing. Going forward developers and landowners may have to consider price arrangements which are potentially linked to the relative proportions of Starter Homes and affordable rented housing.

For more information please contact Lucy Smallwood on lucy.smallwood@michelmores.com or 01392 687555

Michelmores and The Education and Employers Taskforce have joined together to celebrate International Women’s Day by hosting ‘What’s my Line’ assemblies at Exeter’s Montgomery Primary School and Holy Trinity CE Primary School, London.

The events, which took place on 8 March 2016, saw pupils ask a series of ‘yes’ or ‘no’ questions to a panel of four women to try and guess their occupations.

Job roles included a Firearms & Explosives Licensing Manager with the Police, a Solicitor, a Picture Editor, a Lecturer in Clinical Linguistics and a Director of Communications.

The Education and Employers programme ‘Inspiring the Future’ aims to provide young people with the inspiration, motivation, knowledge, skills and opportunities they need to help them achieve their potential.  The charity also works to connect state schools and colleges to employers and people from the world of work through its secure matchmaking website.

Volunteers − from apprentices to CEOs, are encouraged to sign-up and pledge just one hour a year to attend an event or workshop at a state school or college in their local area.

Alice Thompson, Deputy Head at Montgomery Primary School said:

“The assembly was a great success – the children thoroughly enjoyed the experience and gained a huge amount in terms of broadening their understanding of how the work they do in school now can help them in the future, as well as combating gender stereotyping in job roles.”

“It was a fantastic and inspiring way to mark International Women’s Day.”

The event was coordinated by Michelmores’ Diversity & Inclusivity Committee alongside The Education and Employers Taskforce, with the aim of raising awareness of gender bias in the workplace.

To sign up to be a volunteer at a school or college near you please visit the Inspiring the Future website.