Changes to planning use classes; what does this mean for commercial property owners and occupiers?

In amongst all the drama of 2020, it may have been easy to overlook the biggest overhaul of the planning system since the 1940s. Huge changes came into effect on 1 September 2020 and Jenny Colvin, Partner in our Commercial Property team, answers some of the most frequently asked questions for you in relation to how those changes affect commercial property owners and tenants.

Why have the planning use classes changed?

It has been over 30 years since the last substantive set of planning changes were introduced and the Government felt that substantive amendment was necessary to reflect the changing use of commercial premises in modern times, particularly in relation to the high street.

What has changed in terms of planning use classes?

From 1 September 2020, the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 came into effect. These regulations have:

• Removed all of the existing ‘A’ class uses (shops and financial/professional services),
• Removed all of the existing ‘D’ class uses (non-residential institutions & assembly and leisure),
• Removed some of the existing ‘B’ class uses (offices),
• Introduced new Use Class ‘E’  which now covers commercial, business and service uses and incorporates (broadly speaking):
  • the old A1, A2, A3 (restaurants and cafes),
  • B1 (a) (offices) and
  • parts of D1 and D2.

• Introduced new Use Classes ‘F1’ and ‘F2’ – ‘F1’ encompasses some of the old D1 uses, including libraries, museums, churches, halls etc.  ‘F2’ is now local community uses, including swimming pools and sports and recreational facilities.

Some other uses previously included within the old use classes have now been moved to Sui Generis, which is a use class all of their own. This includes beauty salons, tattoo parlours, bars and pubs, vehicle sales, taxi companies, and launderettes and will these uses always require planning permission.

Most significantly, changes of use within this new Use Class ‘E’ do not require planning permission.

Are these positive changes for owners of commercial properties?

This will depend on your situation! As a landlord of a shop on the high street, for example, this will hugely assist in the letting of vacant units as a change of use within Use Class E will no longer need planning permission, opening up the market to far more possible tenants. The same will apply as a tenant looking to assign a lease, depending on the lease terms themselves.

In bringing these uses together, it also allows property owner-occupiers flexibility for their existing premises to move between uses without the need for further consents from the local authority, meaning they may be able to diversify their business model.

However, some uses have been moved to Sui Generis, removing the previously allowed permitted development rights, which potentially will negatively impact some premises owners.

How will the changes affect me?

If you are a landlord, you may wish to consider which of these uses you would be happy for future tenants to move between. Without an appropriate restrictive covenant, or the further drilling down of the specific part of a Use Class that you wish to permit, in the lease, you are opening up the potential uses very wide.

If you are a tenant taking a lease with a widely drafted user clause and no further restrictions on the use, you may well be able to assign or underlet your lease (terms permitting) to a far wider body of businesses. For example, a shop could now be let as an estate agency, office or restaurant whereas before permission from the planning authority would have been necessary. This also will depend on your own lease terms though.

If you have been looking to diversify the use you can put your property to as a business premises owner, you may well now be able to do so freely now that the obstacle that was the need for planning permission has been removed.

What else has happened under the new planning regulations?

There will be a transitional period until 31 July 2021, where the former use classes apply for the purposes of permitted development. You can therefore continue to change the uses between the existing permitted use classes as per the old permitted development rights until then.

It is worth noting though that a campaign group have brought a judicial review challenge against the Government as a result of these changes, arguing that they have not been lawfully made as they have been brought in without proper consultation or parliamentary debate. This legal case is due to be heard early October, but if the judge agrees, then the changes could all be reversed. Care should therefore be taken in relying on these changes for this interim period when committing to new business premises.

If you have any queries about your commercial lease or business premises and are looking for advice in relation to your commercial property, please contact Jenny Colvin in our Commercial Property team on 023 9277 6558 or email jennycolvin@warnergoodman.co.uk. Please note that Jenny cannot give specialist planning advice. 

ENDS

This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice.  We accept no liability for the content of this material.  All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.