Service pages: planning

Five things the Gen+1 Elevate conference made clear about the data centre market

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I attended the Gen+1 Elevate conference last week as part of the Forsters data centre team.

Demand for data centres is accelerating. That is no longer up for debate.

The more interesting question, and the clear theme from the panels, is whether projects can actually be delivered.

Across the panels, five themes stood out.

1. The real investment story is about execution, not yield

The numbers still work. Yields of 8-9%, and 5-7 year investment horizons continue to attract capital.

Investor focus, however, has clearly shifted.

The key question is no longer “should we invest?” but “can this scheme actually be built?”

That is driving a much sharper focus on:

  • planning risk;
  • power availability and timing; and
  • delivery capability and access to labour.

The rise of joint ventures reflects this. Investors are increasingly looking to partner with operators, energy providers and developers to access expertise they do not have in-house.

Collaboration though brings complexity. Alignment of interests, exclusivity and the risk of partners becoming future competitors are now live issues that need to be addressed early.

2. The definition of a “good site” is changing rapidly

Five years ago, a data centre site had a relatively clear profile. That is no longer the case.

Constraints around power, land and scale are forcing developers to rethink location and design. Sites that would previously have fallen outside the investable universe are now being revisited.

Flexibility is becoming the defining characteristic.

There was also a degree of realism in the room. Certain trends, particularly around modular solutions and aspects of the AI ecosystem, were openly described as over-hyped. The expectation is that the market will consolidate, with a limited number of long-term winners.

3. Power is no longer a constraint. It is the constraint

Every conversation ultimately came back to power.

The gap between demand and available capacity is now well understood. What is less well understood is the complexity behind it.

As we are seeing on our projects, “having power” is not a binary issue. It raises a series of more difficult questions:

  • when will it be available;
  • how reliable is it; and
  • what infrastructure is required to support it.

Operators are responding in different ways. Some are exploring on-site, behind the meter, generation and alternative energy solutions. Others are seeking greater control of their supply chain to reduce reliance on constrained infrastructure.

The conclusion is clear. Power availability, in both timing and structure, is now the single biggest factor in determining whether a project proceeds.

4. The delivery model is under strain

Even where land and power are secured, delivery is far from straightforward.

Supply chains are stretched, with long lead times for key components, including fibre. At the same time, there is a growing disconnect between leasing expectations and construction timelines.

The industry is also facing a significant skills gap. Quite simply, there are not enough people to build what is currently in the pipeline.

In response, operators are:

  • bringing parts of the supply chain in-house;
  • increasing use of prefabrication; and
  • using AI to improve productivity and safety.

These are mitigation strategies rather than solutions. Delivery risk remains a core issue.

5. Planning and perception are becoming commercial issues

Planning is no longer just a legal or regulatory hurdle. It is a commercial one.

There is increasing scrutiny of how data centres are perceived at the development stage, particularly in relation to energy use and pressure on infrastructure.

At the same time, the industry is not always effective at communicating the value data centres generate. The economic impact of large-scale schemes is significant, but often poorly understood outside the sector.

This is creating a need for better engagement, clearer messaging and a more coordinated approach to how the industry presents itself.

What this means for clients

The takeaway is clear. Demand is not the problem. Delivery is.

For investors, developers and operators, that shifts the focus to execution from the outset. In practical terms, that means:

  • Front-loading strategy so that planning risk, power timelines and deliverability are assessed early;
  • Structuring partnerships carefully, with clear alignment on roles, risk and long-term strategy;
  • Taking a holistic view of viability, recognising that land, planning, power and infrastructure need to be considered together;
  • Actively managing delivery risk, particularly in relation to supply chain, skills and program assumptions;
  • Retaining flexibility, both in site strategy and structuring, as requirements continue to evolve.

The projects that succeed will not necessarily be those with the best sites or the strongest demand. They will be the schemes where planning, power, capital and capability are aligned from day one.

That alignment is now where the real value sits.

If any of these themes resonate, get in touch with Forsters’ data centre team. We are already advising on these challenges across a range of projects and bring the depth of experience needed to deliver them successfully.

Demand is not the issue. Delivery is. Five practical takeaways from Gen+1 Elevate on what is really driving the data centre market.

BNG update: exemptions and further consultation

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Following the 2025 public consultation into improving the implementation of biodiversity net gain (BNG) for minor, medium and brownfield development, the Government has announced the following:

  • Removal of the self and custom build exemption. The Government expects that small scale single dwellings will be covered by the new area based exemption.
  • The Government announced in December 2025 a new 0.2 hectare area-based exemption for all applications, regardless of the development type. The existing de minimis exemption will continue to apply at this stage.
  • Temporary planning permissions granted for a maximum of 5 years will be exempt from the BNG regime.
  • Amendments to the biodiversity gain hierarchy for minor development, placing off-site biodiversity gains on the same preference as enhancement and creation of onsite habitat. 

All of the above are now expected to take effect before 31 July 2026 (subject to parliamentary scheduling) with draft legislation being tabled by DEFRA. 

A new consultation has also now been launched on an exemption for residential development on brownfield land, closing in June 2026. The Government expects to bring forward any amendments arising from that consultation later in 2026. 

The Government has reiterated its commitment to the BNG regime and these new announcements appear to show an attempt to strike a balance between this position and its commitment to support development, particularly in respect of house-building targets. From a local authority perspective, these amendments are likely to mean determination of smaller applications can progress faster without consideration of the requirements of the BNG regime. 

The government remains committed to BNG and recognises the importance of BNG in delivering nature-positive homes and infrastructure that this country needs.

https://www.gov.uk/government/consultations/improving-the-implementation-of-biodiversity-net-gain-for-minor-medium-and-brownfield-development/outcome/government-response-and-summary-of-responses#government-response-part-1-improving-exemptions

How to reduce your CIL liability

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Despite the Community Infrastructure Levy “CIL” first being introduced 15 years ago, it remains a complex area of planning law that has resulted in the CIL regulations being amended various times.  Numerous pitfalls remain for developers if close attention is not paid to the strict requirements of the Regulations.

CIL is payable in respect of developments which create a net additional floorspace of 100sqm or more or create a new dwelling. The amount payable is calculated by the Collecting Authority “CA” in accordance with their CIL charging schedule. The sum is non-negotiable and is payable following implementation of development. 

There are various reliefs and exemptions available to reduce CIL liability, but care needs to be taken to ensure they are correctly applied for otherwise the full CIL liability may become due.

Some of the most common reliefs available to individuals carrying out works to their home are set out below. 

Exemptions and reliefs

Part 6 of the CIL regulations identifies numerous exemptions and reliefs including: 

Minor Development (reg 42)

If on completion of a development, the gross internal area “GIA” of the new build will be less than 100sqm, liability to pay CIL will not arise. “New build” includes a new building and enlargements to existing buildings. Unfortunately, this exemption does not apply to developments comprising a new dwelling. It does, however, apply to alterations to existing dwellings. 

This exemption is automatic and no application to the CA needs to be made. 

Residential annexes or extensions (reg 42A)

A person is exempt from CIL liability, for development comprising a residential annex or a residential extension if:

  1. They have a material interest in the dwelling i.e. freeholder or leaseholder;
  2. They occupy it as their sole or main residence i.e., it does not apply to second homes;
  3. In respect of a residential annex, the annex:
    1. Is wholly within the curtilage of the main dwelling; and
    2. Comprises one new dwelling.
  4. In respect of a residential extension, the extension:
    1. Is an enlargement of the main dwelling which is the applicant’s main or sole residence; and
    2. Does not comprise a new dwelling.

The reliefs can be applied for by using ‘Residential Annex Extension Claim (Form 8)’ or the ‘Residential Claim (Form 9)’. All documents and particulars specified in the form must accompany the application. 

It is important to note that if development commences prior to the CA granting the exemption, the right to claim will be lost. This does not apply where a provision of the residential annex or extension changes after commencement of development.

Please note that there is a clawback period for residential annex emption that will result in the original CIL liability becoming payable. It is triggered by a disqualifying event occurring within 3 years of the development completing. A disqualifying event includes:

  • the main dwelling being used for anything other than a single dwelling;
  • the residential annex being let; or
  • the main dwelling or the annex being sold unless they are sold at the same time to the same person. 

Should a disqualifying event occur, the CA must be notified within 14 days, failure to do so may result in a surcharge. 

There is no clawback period for residential extension relief i.e., no requirement to pay back the original CIL if the criteria are no longer met, provided that the applicant acted honestly when they declared they would occupy the extended dwelling for three years. 

A surcharge may be imposed if development commences without having first served a commencement of development notice. 

One of the key requirements for residential annex and extension relief, is that the applicant occupies the property as their sole or main residence. A declaration, confirming the same, is made as part of the application process for the relief. This can cause issues where a property is purchased with the intention of renovating it prior to occupation. In this scenario the relevant declaration cannot be made and so the relief will not apply. Many people think that as they intend to occupy it as their sole or main residence, the condition is satisfied. However, this is not the case. 

A false declaration to a requirement under the CIL regulations is an offence which may result in unlimited fines, two years imprisonment or both. 

Self-Build Housing (reg 54A)

Self-build housing relief applies where a person builds a property with the intent that it will be occupied as their sole or main residence i.e., it does not apply to second homes, liability (for the new dwelling) must have been assumed by the person applying for the relief. 

There are two stages to claiming Self-Build relief:

  1. Submission of ‘Self-Build Exemption Claim Form 7 Part 1’ – this form must be submitted, and a decision must be received prior to commencement of development. However, the qualification applicable to residential annex and residential extension relief regarding changes post commencement also applies to self-build housing relief; and
  2. Submission of ‘Self-Build Exemption Claim Form 7 Part 2’ – this form must be submitted within 6 months of the date of the compliance certificate confirming that the development is self-build housing. Failure to submit this form will result in CIL becoming payable. 

If within 3 years of the completion of the property a disqualifying event occurs, the CIL liability which would have become payable but for the relief being granted, will become payable. A disqualifying event includes:

  • Any changes which result in the self-build housing requirements to cease being satisfied i.e., the property is no longer the applicant’s sole or main residence.
  • The applicant does not submit Form 7 Part 2 or any supporting evidence. It is possible to retain the relief despite not submitting the relevant documents provided they are submitted before the CA takes enforcement action. The CA will give 28 days’ notice prior to taking enforcement action.
  • The property is let or sold.  

The CA must be notified of a disqualifying event within 14 days, failure to do so may result in a surcharge. 

A surcharge may also be imposed if development commences without having first served a commencement of development notice. 

Self-build housing relief also requires the applicant to occupy the property as their sole or main residence. The application form requires a declaration to be made confirming the same. It is important to note that where it is intended for a relative to live in the property and not the applicant, the relief will not apply. It does not matter that no formal tenancy is in place, or that no rent is charged. 

Please note that there are also reliefs for developments relating to social housing, self-build communal developments and charities. If you would like any further information, please contact Ella Jones. 

Other deductions

It is not just the exemptions and reliefs identified above that can reduce a development’s CIL liability. The internal floorspace of a relevant building can be deducted from the GIA of a development. The reduced GIA will be the relevant GIA when calculating CIL liability:

  1. Demolition deduction – applies to buildings which, when development is first permitted, is in existence, is an “in-use building” and will be demolished as part of the development;
  2. The first retained building deduction – applies to buildings which, when development is first permitted, qualifies as an “in-use building” and will be retained upon completion of the development; and
  3. The second retained building deduction – applies to buildings which, when development is first permitted, is in existence, does not qualify as an “in-use building” and will be retained upon completion of the development for a permitted use which was the same as the use immediately prior to development first being permitted i.e., the building has a lawful use but it does not meet the “in-use building” criteria and that lawful use will continue following the development.  

An “in-use building” is a building which—

(i) is a relevant building i.e., the building exists within the application boundary at the date planning permission is granted (it cannot be demolished and rebuilt on the same footprint and with the same dimensions); and

(ii) contains a part that has been in lawful use for a continuous period of at least six months within the period of three years ending on the day planning permission first permits the chargeable development.

Whether a building is in use will depend on the facts of each matter. However, simply having a lawful use will not suffice. 

The CA may require evidence to support a claim that a building is “in-use”. This may be photography evidence, utility bills etc. When purchasing a property with the intention of developing it, a statutory declaration from the previous owner could be obtained, especially where the property will be vacant until planning permission is granted. 

To offset the GIA from CIL liability, no formal application needs to be submitted. Instead, the relevant sections of ‘Form 1: CIL Additional Information’ must be completed. This form is usually submitted alongside the planning application, but it can be amended later, especially if the circumstances change i.e., a building meets the “in-use” criteria during the planning application process. 

It is important to always correctly complete the relevant sections of the form, even if the intention is to apply for an exemption. This is because, if a relief is not granted or subsequently lost during the clawback period, the GIA deductions will still apply. 

Conclusion

Lots of people will look to relay on reliefs and exemptions to reduce their CIL liability. Care will need to be taken to ensure that the conditions of the exemptions are met particularly where there is a clawback period. Failure to comply with conditions could result in owners of properties facing significant CIL liability.