The rapid growth of data centres is reshaping the UK real estate market, driven by increasing demand for AI, cloud services, and digital infrastructure. Government support through Critical National Infrastructure (CNI) designation and the ability to apply for Nationally Significant Infrastructure Project (NSIP) status has accelerated delivery.
Yet beyond planning and utility challenges, data centre schemes must still navigate private law risks. Once issues such as access, restrictive covenants, and mines and minerals are resolved, rights of light (RoL) often emerge as the next major hurdle.
What are rights of light?
A right of light is a legal entitlement allowing a landowner to receive natural daylight through specific windows or openings in their property. These rights can be granted expressly in writing or acquired after 20 years of uninterrupted enjoyment.
Much of the land now considered ideal for data centre development lies within areas of established urban sprawl, including so-called ‘grey belt’ land or brownfield industrial sites. This brings them into contact with long‑standing residential and mixed‑use buildings that may already benefit from rights of light.
Data centres are necessarily large and highly engineered structures, designed to accommodate dense racks of servers and their extensive cooling and power systems. This size and bulk can obstruct light to neighbouring properties.
Where rights exist, affected landowners may seek an injunction to halt construction or pursue damages. This creates a material risk to project deliverability and financing, even for developments that otherwise satisfy planning requirements.
Consequences for data centre developments
The financial impact of a rights of light claim can be significant. Damages were once typically assessed on a “book value” basis, compensating for the loss in value to the affected property. Increasingly, however, courts are awarding “development gain” damages – sums that reflect what the parties might reasonably have agreed had the developer sought consent before building. This shift, reaffirmed in recent judgments such as Beaumont v Florala (2020) and Cooper v Ludgate House (2025), means awards are often linked to a share of the developer’s profit from the infringing part of the development.
Injunctions can be even more disruptive to data centres. Court may order developers to stop construction or – in extreme cases – to cut back projects that have been already built. For data centres, where every square metre is tightly calibrated around cooling, airflow, and rack configuration, even minor cutbacks can undermine operational integrity. Claims costs can be substantial, with potentially liabilities running into seven or eight figures. The prospect of delay or enforced redesign also creates uncertainty for funders.
Mitigating rights of light risks
To reduce exposure, developers should adopt a proactive strategy:
Early assessment – engage rights of light surveyors before designs are fixed, ideally at site acquisition or concept stage. This allows potential problem properties to be identified early, and ensures that design teams can balance operational requirements with legal constraints before significant costs are sunk.
Scenario planning – model the cost and feasibility of potential cutbacks against the scale of likely claims. This helps avoid late stage redesigns, strengthens negotiations with neighbours, and gives funders a clearer view of potential liabilities.
Insurance solutions – bespoke RoL policies can cover both injunction risk and damages awards. This can assure funders and stakeholders that liabilities are managed effectively, and allow projects to proceed without costly delays.
As data centres become ever more critical to the UK’s digital economy, addressing rights of light early is not just a legal necessity but a commercial imperative. Navigating these risks calls for a blend of technical expertise, careful modelling, and pragmatic advice, ensuring that projects can be de‑risked and delivered with confidence.
For more information, reach out to a member of our team.
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