Government moves on planning reform to open up opportunities for landlords

Guest article from Dan Cowley, Director and Urvashi Sudull, Trainee Solicitor, at law firm Whitehead Monckton.

The economic climate caused by COVID-19 continues to see a pattern of businesses vacating commercial premises due to the uncertain economic outlook. As a result commercial landlords are increasingly left with empty premises, with limited prospects of finding new commercial tenants in the short term.

The government have, in the past, implemented various laws to assist property owners in changing the use of commercial properties to keep up with the demands of the economy.  Planning permission is usually required when making any material change in the use of buildings or land, for example, changing restaurant premises into offices. However, certain changes of use, if they fall within certain classes (under the Use Classes Order 1987) will not require planning permission. The previous system contained 4 mains classes (each class contained subclasses);

• Class A- retail, restaurants, pubs;
• Class B- offices, storage units;
• Class C- residential; and
• Class D- Non-residential institutions, e.g. museums.

For example, a change of use from a newsagents to a clothes shop (both within subclass A1) would not require planning permission. However, these classes were deemed to be very restrictive. The current pandemic has strengthened the case for reformation to allow property/business owners increased flexibility in some areas to meet economic demands, without the delays caused by obtaining planning permissions.

In response, the government’s infrastructure plan ‘Project Speed’ launched in June 2020 to address the concerns of property owners. The plan aims to provide “greater freedom for buildings and land…to change use without planning permission”.

A new class regime commencing on 1 September 2020, is now in force. The creation a new class E ‘Commercial, Business and Service’ is most relevant to commercial property owners and will consist of the previous subclasses A1 (shops), A2 (professional services), A3 (restaurants), B1 (offices), D1 and D2 (health centres, gyms etc…). Unless the properties in these classes are subject to conditions, such as planning controls, the use can be changed within class E without planning permission. For example, office premises can now be changed to restaurants which would not have been permitted under the previous class uses and vice versa.

At the time of writing this change to the use classes regime is subject to a legal challenge to overturn this new law. The challenge has been heard but the decision has not yet been published.

The Town and Country Planning (General Permitted Development)(England) Order 2015 (GDPO) can also prove useful to commercial property owners who are looking to see if they can repurpose their property without the need to obtain planning permission. The GDPO allows offices which fall within the previous class B1 uses to be changed to residential houses without planning permission if certain conditions are met and the application successfully completes a prior approval process. Even with the abolishment of the class B1 uses under then new regime, these permitted development rights under the GDPO will remain in place for the transition period of the new classes until 31 July 2021.

The government has recently extended these permitted development rights in the form of class ZA allows for the demolishment of vacant commercial buildings, which fall within certain classes, to be replaced by residential developments. Various conditions apply, including the age and height of the property. As with the change to the use classes regime this new class is also currently under challenge.

Commercial property owners should also be aware the local authority can in certain circumstances issue an Article 4 Direction which effectively removes these permitted development rights for specific areas within their jurisdiction. Additionally, if a property falls in a designated planning area, such as a conservation area or an area of outstanding natural beauty, these permitted development rights are withdrawn planning permission is always required for a change of use outside of a specific use class.

Permitted development rights are often complex. Usually a pre-approval process will also have to be completed for permitted development rights. This process will include submitting supporting documents relating to plans, risks, transport and various other matters. Therefore, it is not a simple case of assuming a property falls with the appropriate permitted development uses class and commencing works. There is also potential Article 4 Directions and designated areas to consider. Appropriate professional advice is therefore always recommended.

Dan Cowley is a Director and Urvashi Sudull a trainee solicitor in the Commercial Property team at law firm Whitehead Monckton. Dan can be reached by email here and Urvashi here. Whitehead Monckton is a law firm with offices in Canterbury, Maidstone, Tenterden and London, acting for landlords, investors, private individuals etc. Visit the website here.