New permitted development rights announcement – a boost for the housing sector

Government reveals new Permitted Development Rights for changing commercial premises falling under the new E class use to residential use, in a move to boost the housing sector

On Wednesday, the Government revealed the content of The Town and Country Planning (General Permitted Development etc.) (England) (Amendment) Order 2021 (statutory Instrument 2021 No. 428), which was laid before Parliament.

The new measures announced by the Government come into force on 21^st April and contain some very significant changes, most notably, the creation of a new permitted change of use class, known as ‘Class MA’ to change commercial properties falling under the new E use class (formerly A1 retail, A2 Professional Services, A3 food and drink, B1 business, D1 non-residential institutions and D2 assembly and leisure) to residential use (class C3 – dwellinghouses).

The measures also included the removal of Permitted Development Rights under Schedule 2, Part 11, Class B of the General Permitted Development Order (2015), so that proposals to demolish unlisted statues, memorials and monuments, that are commemorative to now require full planning permission from 21^st April 2021. Our article written by Simon Britt, our Principal Heritage Consultant, explains this in further detail here.

What are the new rights for Class E buildings to convert to residential?

From 21^st April, developers will be able to submit requests to Local Planning Authorities to determine whether or not Prior Approval would be required to change the use of vacant E use class buildings to residential use.

To qualify for the new Permitted Development (PD) right, an E use class building must have been vacant for a period of at least 3 months and have been used last for a single use falling under the E use class, for a period of at least 2 years before it was vacant.

The PD right allows for a cumulative floor-space of up to 1500m² to be converted to residential use, which is a significant amount.

The new PD right applies in areas such as Green Belt, Conservation Areas and the open countryside beyond development limits, where it is usually more challenging to establish new residential use in planning policy terms. However, areas such as National Parks, AONB’s, Listed Buildings and World Heritage sites are exempt (amongst others).

Article 4(1) Directions relating to offices now falling under the E use class will remain in place until 31st July 2022.

Before beginning a development under Class MA, the legislation states that –  “the developer must apply to the local planning authority for a determination as to whether the prior approval of the authority will be required as to –

(a )transport impacts of the development, particularly to ensure safe site access;

(b) contamination risks in relation to the building;

(c) flooding risks in relation to the building;

(d) impacts of noise from commercial premises on the intended occupiers of the development;

(e) where—

(i)the building is located in a conservation area, and

(ii)the development involves a change of use of the whole or part of the ground floor, the impact of that change of use on the character or sustainability of the conservation area;

(f) the provision of adequate natural light in all habitable rooms of the dwellinghouses;

(g) the impact on intended occupiers of the development of the introduction of residential use in an area the authority considers to be important for general or heavy industry, waste management, storage and distribution, or a mix of such uses; and

(h) where the development involves the loss of services provided by—

(i) a registered nursery, or

(ii) a health centre maintained under section 2 or 3 of the National Health Service Act 2006(2), the impact on the local provision of the type of services lost.

If the LPA deem that Prior Approval is required for the proposed change of use, an application for Prior Approval cannot be made until 1^st August 2021 under the legislation.

The creation of Class MA is a significant change in legislation from the Government which is seeking to unlock vacant brownfield sites to boost housing supply in areas such as Green Belt and the open countryside where it is difficult to establish residential use in national and local planning policy terms. The Government clearly sees this change as part of their wider strategy to build up to 300,000 new homes a year by 2025.

Peter Hopkins of Pegasus Group considers that: “the new PD rights could be applied to establish a baseline residential floor-space to a vacant E use class building, then once acknowledgement or Prior Approval from the Council has been received, a full planning application could be made to replace the residential floor-space with new build dwellings to the same floor-space area, using the same principles as a replacement dwelling(s) application.”

Wider opportunities, but some implications be aware of

As discussed above, the new rights create significant development opportunities. However, it is also relevant to note the changes that will affect those existing permitted rights which developers have come to rely on, as this will affect planning and development strategies.

After 1st of August, the new rights will limit the floorspace within a building which can benefit from the change of use permitted development right to below 1,500 square metres, a limit which did not exist previously for converting larger office spaces to residential use under Class O for example.

Developers considering office to residential conversions of larger office buildings will have to progress them before the new rights come into place on the 1st of August, or via full application thereafter. Additionally, the requirement of the new rights for the building to have been vacant for at least 3 months prior to the application (excluding closure during Covid restriction), and for the building to have been in a qualifying use for at least 2 years, adds requirements beyond the existing situation which could exclude some buildings from qualifying.

Vacancy can be engineered in preparation for an application; however lease requirements and potentially forgoing commercial rents may not be convenient or attractive in many instances, and could lead to additional cost outside of the planning process for developers. Furthermore, the additional planning application fee of £100 per dwellinghouse up to a limit £5,000 goes well beyond the £96 required for a Class O office to residential prior approval applications currently. Whilst this increase is more proportionate to the resource needed to process the application by the LPA, it will be a notable increase on the existing situation for many developers and may affect their planning application strategy.

Therefore, there is no doubt that the new rights create some significant development opportunities to change a wider range of commercial uses to residential. However, they also impose some notable restrictions beyond existing permitted development rights relating to Class O which are important to be aware of. Developers will have a narrow window before the 1st of August within which to progress applications under the existing permitted development rights for Class O. It is possible we will see a surge of prior approval applications before 1st of august, which will require careful management given many LPA’s are already experiencing resourcing issues.

This article was written by Peter Hopkins, Principal Planner from Leeds, and Nick Kirby, Director in our Bracknell office. Please get in touch with Pegasus Group if you would like to discuss planning possibilities and opportunities for development using Permitted Development Rights.