Light Bites – Roundtable – Key Takeaways
At the end of the Light Bites podcast series, we hosted a lively roundtable discussion at GIA’s offices to explore some of the key themes that emerged from the series. The group included developers, investors, development managers, academics, insurers, and insurance brokers. The key themes discussed were the exercise of Section 203, the role of insurance in the current market, the effect of the Bankside decision (including the recent costs decision), and the role of well-being in relation to natural light in buildings.
It was acknowledged that developers face significant regulatory and viability challenges in the current climate, which were beyond the scope of the discussion. The purpose of the session was to drill down into where rights to light fit within that matrix and to consider ways to mitigate this particular risk.
One attendee commented: “The developer money tree is pretty bare at the moment.”
Another asked: “Can we even afford to protect light? It favours the few over the many—a small handful of neighbours preventing the development of many new homes.”
Section 203 Powers – Scope, Eligibility, and Strategic Use
The roundtable opened with a discussion of section 203 of the Housing and Planning Act 2016 and whether it should be more widely used or should remain a remedy of last resort. It was noted that the application of section 203 varies greatly depending on the local authority involved. A key observation was that planning viability assessments do not currently account for rights of light payments or the cost of feasibility studies, which may understate the true financial burden on developers.
From a strategic perspective, the use of section 203 was framed as a means of “buying certainty and time”, with money saved on rights of light claims capable of being recycled into affordable housing and other public benefits. It was emphasised that the public benefit test has already been demonstrated at the planning stage, which would make section 203 more readily available. It was also suggested that, in the current difficult climate for development, housing and offices should be recognised as critical infrastructure.
It was unanimously agreed that developers need a better understanding of the availability and application of section 203, and that a more consistent approach by local authorities is essential. One suggestion was that the latter could be mandated and enforced by central government as a measure to boost development.
Insurance
There was discussion of a shift towards self-insurance by some developers in recent years, given the contraction of the insurance market. The time and cost of securing releases were discussed, as was the fact that a failure to conclude releases could put financing and transactions at risk.
The insurer and broker in the room both felt that the Bankside decision had been positive, as yet another example of an injunction not being granted. They cited an expansion of capacity in the market, with at least one new entrant and one insurer returning after a period of absence. They also said insurer’s requirements post bankside is that they may not require a cutback study on every single site now because it’s no longer considered that profit will always be based on 1/3, it could be 12.5% or whatever else the judge deems appropriate. They do however make presumptions on profit being around 20% so if this is exceeded, they may still require a cutback. It should be noted that cutbacks may be needed for other reasons.
There was also discussion of two-stage cover where section 203 is involved, with excesses reducing following a successful appropriation.
The Bankside Decision and Its Impact
Considerable attention was given to the Bankside costs decision and whether it has “changed the game” for rights of light litigation.
Panellists discussed the significance of the link between damages and the value of the affected flats, which was viewed as a helpful development for developers. It was observed that the judge may have sought to be too fair in balancing the overall outcome between the neighbours and the developer, particularly when the impact of the costs decision is taken into account. Some in the room felt that, based on the facts as they understood them, there was a case for one of the neighbours to have suffered a meaningful and demonstrable loss —which would have deterred future speculation in such cases.
A further point of discussion concerned the Part 36 offer in the Bankside proceedings. The offer was described as “not invalid but ineffective”, in the sense that the judge was unable to determine whether the claimant, Mr Cooper, had in fact beaten the defendant’s offer.
Daylight, Sunlight, and the Broader Debate
The roundtable closed with a more philosophical discussion about the tension between daylight, sunlight, and rights of light. It was suggested that daylight and sunlight policy considerations risk "favouring the few over the many" — protecting the amenity of individual neighbouring owners at the expense of broader housing delivery and urban development.
A further tension was identified in the way developers market their own schemes. Developers routinely promote new developments as offering abundant natural light, while simultaneously resisting claims from neighbours whose light is diminished by those very developments. Panellists suggested that natural light considerations should, in principle, be irrelevant to rights of light claims, though this remains a point of debate. It was agreed that there needs to be a better understanding of the amount of light required in buildings, and the research planned by GIA and Dr Peter Defoe, in conjunction with Anglia Ruskin University, was raised as a potential answer.
Are Rights of Light really a barrier to development?
The roundtable considered the broader policy question of whether rights of light represent a genuine barrier to development. It was noted that cases rarely proceed to court, which may suggest that the issue is more one of perceived risk and cost than of outright obstruction.
This point was linked to investor sentiment. The UK government’s message that the country is “open for business and investment” was discussed alongside the observation that foreign investment in UK real estate is increasing. However, panellists cautioned that overseas investors, in particular, tend to view rights of light exposure purely as risk, without appreciating the nuances of the legal framework. There is, accordingly, a role for government in helping to manage and reduce that perception of risk. This took the discussion back to the Law Commission’s report on rights of light, which dates back to 2014 and remains firmly on the shelf. As one participant who was involved in the report observed, what is needed is certainty—and that is what the Law Commission sought to achieve. Given that the Law Commission’s proposals are unlikely to be implemented any time soon, the most immediate opportunity for certainty comes in the form of Section 203, with more support from local authorities and, possibly, a more holistic approach from the Greater London Authority.
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