Marketing of heritage assets


GN2017/6, Aug 2017


This is one of a series of occasional Guidance Notes published by The Institute of Historic Building Conservation (IHBC). IHBC Guidance Notes offer current and recent guidance into topics that we consider crucial to the promotion of good built and historic environment conservation policy and practice. The Notes necessarily reflect knowledge and practice at the time they were developed, while the IHBC always welcomes new case examples, feedback and comment to research@ihbc.org.uk for future revisions and updates.



Executive Summary

1. This is a short guidance note regarding what should constitute a marketing exercise as a preliminary to considering significant change to listed buildings- at-risk. It is also applicable where a proposed change of use would lead to unacceptable physical alteration, and the local planning authority would require evidence of a marketing campaign to demonstrate no viable alternatives.

2. Further information would be welcome for further updates of this note regarding the scope and content of past marketing exercises. Custom and practice suggests that the minimum timescale usually considered appropriate for a proper marketing campaign is 12 months but details of cases where the local authority considered a period of less than of 12 months to be sufficient would be helpful.


The National Planning Policy Framework
3. The National Planning Policy Framework (NPPF) is not helpful with regard to the marketing of buildings. Paragraph 17 outlining a set of core land-use planning principles states that account should be taken of ‘market signals’ in both plan-making and decision-taking such as land prices and housing affordability; and paragraph 22 (in relation to employment land) says that ‘applications for alternative uses of land or buildings should be treated on their merits having regard to market signals’ but these signals are not otherwise defined.

4. The nub of the issue regarding ‘marketing’ of heritage assets is paragraph 133 the only time the word appears in the NPPF. Where proposals will lead to substantial harm or total loss of significance, local planning authorities should require the testing of viability ‘in the medium term through appropriate marketing that will enable its conservation’. Similarly the medium term is not defined. [1]

5. A mechanism for testing might be indirectly through the recommendation in paragraph 169 that authorities have up-to-date evidence about the historic environment in their area, although it is considered unlikely that they will have the resources to test this with any frequency. Often evidence is entirely anecdotal on the basis that the market tends to find appropriate solutions for heritage-at-risk only in the more economically buoyant areas and attractive environments.

6. Commercial marketing related to applications for listed building consent. Local Plan Policies will usually include a requirement for additional information in order to justify proposals for substantial alteration including those brought about by change of use, or demolition.

7. It is desirable that the original use of a historic building should continue wherever possible. As a result, when changes are likely to arise from a proposed new use, it will usually be necessary to demonstrate through the marketing of the building that there is no potential for the existing use to continue, or to reinstate its original use, or to introduce some other use that demands less alteration.

8. Applicants need to be able to demonstrate that all reasonable efforts have been made to sustain the existing use or find a suitable alternative, and usually to demonstrate that the building has been offered for sale. The typical timescale for an appropriate marketing campaign (for sale or for rent) is 12 months during which time the authority also needs to ensure that the fabric does not suffer accelerated deterioration. [2]

9. The following notes represent a sequential approach to marketing likely to be required prior to the determination of an application for substantial change as outlined above.


Marketing Strategy
10. Where fundamental issues concerning the future of the building have been identified, requiring evidence of marketing to justify the proposals, it is sensible if an appropriate strategy is agreed between the applicant and the local planning authority prior to commencement of the marketing. This should enable baseline information requirements and consideration of uses to be take into account.

11. Large or complex buildings will inevitably have higher information requirements than small and simple ones and the additional, more extensive details expected by the local authority can be defined at the outset.

12. A marketing strategy for the building should normally be expected to include the offer of the unrestricted freehold or long leasehold (typically 99 or 125 years) at a realistic price reflecting its condition at that point and as far as ownership will allow, with an appropriate curtilage – depending on the scale and type of building and the extent of the site. [3]


Sales Particulars and Appointing an Agent
13. The scale and significance of the building should guide the commissioning process. One or more firms of local chartered surveyors or estate agents may best know the local market and have a good knowledge of the property and the heritage considerations that will apply to it. Large and complex buildings and sites, and buildings of national interest or importance may require agents with a regional or national presence. Unless the building is small and will only appeal to a niche market it may be necessary to appoint more than one agent.

14. As part of the marketing submission a copy of the letter instructing the agent should be supplied to the local planning authority and before the sale particulars appropriate for the type of property are produced the agent(s) should be made aware of any designations, restrictive covenants, rights of way, easements etc. and the nature of the title available.

15. Local planning authorities will normally expect to see at the very minimum, a printed brochure usually comprising two sides of A4 and including at least one representative current photograph. The sale particulars should state the grade of the listed building, whether it lies within a conservation area or is within the curtilage of another listed building and also if it is isolated or, for example, within a defined settlement boundary.

16. As part of their heritage at risk strategies, some local planning authorities produce planning or development briefs and where this is the case the document should be appended to the sale particulars. The Planning or Development Brief may in certain circumstances also be accompanied by a Conservation Statement with a requirement to any potential purchaser that they confirm they have read these documents and that they undertake to come forward with a scheme that clearly follows their advice.


Valuation
17. The asking price will normally be the market value as defined by the RICS Appraisal and Valuation Standards. [4] This must take into account the structural condition of the property and the heritage and/or any planning constraints affecting it. The price must also take into account any issues about the setting of the building that could restrict future uses, such as a registered park and garden.

18. For the purposes of testing the market, this figure may reflect alternative uses that are in accordance with the authority’s planning policies, but must not be based on potential uses for which consent is required but has not yet been obtained, particularly where such a use is contrary to established heritage or planning policy.

19. In arriving at a valuation, the surveyor’s methodology will need to be clearly identified and demonstrated to the local planning authority. It must also show what figure, if any, has been allowed for any fixtures and fittings as well as for the building itself bearing in mind that the removal of fixtures may require listed building consent.

20. For non-residential proposals in particular, the floor area should also be identified so that a value per square foot can be established for comparison with elsewhere on the local market. [5]

21. Local planning authorities need to be cogniscent of situations where, under pressure from the owner, the property appears to have been inappropriately valued (and therefore incorrectly marketed). Where there are good grounds for believing this to be the case, in appropriate circumstances, the neutral opinion of the District Valuer should be sought.


Advertising and marketing
22. Once the particulars have been agreed and the valuation set, proper and extensive marketing of the building should take place. Advertisements should appear in all the relevant magazines and journals circulating locally and regionally and via the Web. Where appropriate, advertising should be undertaken nationally. Professional advice from the selling agent(s) in this regard is essential but note should be taken of the potential of niche marketing as outlined below.

23. The local planning authority should expect to see emphasis on active marketing, rather than, for example, an agency merely placing the building on its website.

24. The size of advertisements and regularity of insertions in local newspapers, magazines and journals are important, as well as the timing of the marketing campaign. The employment of appropriate phraseology is essential. The use of terms such as, for example ‘development opportunity’ may (or may not) create the wrong perception of the changes that might be suitable.

25. In the majority of cases, a signboard should be erected on the site but it is essential that the building and/or the site if vacant is made secure beforehand so that there is no risk of heritage crime.

26. Some enquiries may be made direct to the local authority but customarily these will be through the agent(s). It is expected that all such enquiries should be logged together with a full record of any inspections and the reasons for a lack interest or no progress. A list of enquirers and their contact details will enable if necessary, a random ‘follow up’ to be made by the authority to determine the accuracy and efficacy of the information provided.

27. A proper audit trail must be able to demonstrate to officers and the relevant committee of the council that every reasonable effort has been made to find a purchaser for the building.

28. As noted in paragraph 8 above, a minimum of twelve months active marketing immediately prior to making a listed building consent application, will be required assuming normal market conditions are operative.

29. Where the historic building is also an existing business, such as a public house, or a change of retail use to residential is proposed, it is customary to seek additional information regarding the business case including steps undertaken to diversify income and/or prevent the deterioration of the business. In addition, any alternative (e.g. commercial) uses, compatible with the building that might have prevented the closure.

30. If all marketing fails, the applicant will need to demonstrate that a reasonable attempt has been made without success to continue the present use or (where appropriate) to find suitable new or mixed uses that are compatible with and appropriate to the listed status of the building.

31.This evidence should be set out in a Marketing Statement explaining to the local planning authority how the agreed guidelines have been met and summarising the outcome of the marketing exercise. It should accompany any application for listed building consent and will form an essential part of a justification case for any proposal for alteration, change of use or demolition.

The marketing statement should include all the details and the evidence of the steps taken to market the building including:

  • a copy of the letter of instruction to the agent(s);
  • the methodology used to arrive at a valuation;
  • the estate agents’ verifiable record of all enquiries received;
  • a copy of the sales particulars, adverts and web-page screen-shots etc.;
  • evidence that the property has not been marketed on the basis of a too narrow range of potential end uses;
  • where appropriate and where a business is involved, commercial evidence that steps that been undertaken to diversify income and prevent the decline of the business.


Niche marketing
32. It is good practice to consider recommending that details of the listed building be supplied to the Society for the Protection of Ancient Buildings (SPAB) for inclusion in its quarterly online Property (for sale) List as this is updated regularly. [6]

33. Details of historic buildings-at-risk could also be considered for inclusion on the annual publications such as Save Britain’s Heritage thematic list of properties on the market; or included on the local or county Buildings at Risk Registers. Grade 1 and 2* buildings in England should automatically appear on Historic England’s Heritage at Risk Register but all these publications have the great disadvantage of being updated annually at best. In Wales buildings at risk of all grades are identified on the Buildings at Risk Register but this is only updated every five years. In Scotland, the Buildings at Risk Register is maintained by Historic Environment Scotland and includes buildings of all categories.

34. There are also other web-based agents who specialize in particular types and periods of property such as Modernist 20th century houses. [7 ] Some of these agents also operate the equivalent of an RSS feed. [8]


Summary
35. Marketing as outlined above will assist in evaluating the possibilities for securing the future of those historic buildings where their continued existence or current use is in doubt but it should not be assumed that any lack of potential market interest in the building for its existing use would automatically result in a favourable consideration of an application for substantial alteration or a particular alternative use until all options have been explored. Buildings at Risk are often capable of waiting longer than we think for the right new owner to be found so it is often best not to rush into irreversible decisions in the fear that the offer on the table may be the only option.

Bob Kindred MBE BA IHBC IHBC MRTPI

Endnotes
1. In business usually referred to as 2 to 10 years but also (unhelpfully) Collins English Dictionary: “the period of time which lasts a few months or years beyond the present time”.

2. The adequacy of the timescales of marketing campaigns from planning appeal decisions are not easily accessible or readily aggregated but it has been noted in several planning appeal dismissals that 4 month campaigns were considered inadequate to prove lack of demand and in a recent case in Westminster (August 2017) marketing was then continued for a further two years resulting in numerous enquiries and building inspections but still no offers bot leading the Inspector to conclude that the marketing campaign had ‘hit the required target’.

3. Conversely, an unrealistic price, restrictive covenants, the offer of a short lease or the offer of a limited or constricted curtilage are likely to reduce the chances of finding a new user.

4. Colloquially know as ‘The Red Book’.

5. Historic buildings were usually built to Imperial dimensions and are sometimes measured and described as such. Modern practice is to measure in metric units and care should be take ensure like-for-like comparisons are made.

6. https://www.spab.org.uk/publications/the-property-list/

7. http://www.themodernhouse.com/sales-list/

8. RSS: Rich Site Summary - a format for delivering regularly changing web content. Many news-related sites, weblogs and other online publishers syndicate their content as an RSS Feed to whoever wants it.