There Are Different Use Classes Of Commercial Property

What Is The Permitted Use?

Under The Planning Laws of the United Kingdom, specifically of England, all commercial land and buildings have a particular “permitted use”. This can mean a use class permitted development rights by the lease. This can also refer to the use permitted under planning law. The lease often makes reference to the categories of use set out in planning legislation so it makes sense to consider permitted planning uses.

Since 1 September 2020, the Town and Country Planning (Use Classes) Order 1987 (amended) provided for different use classes for England and Wales respectively. Wales has devolved powers, so different planning laws and legislation apply. Note therefore each use class regime is listed separately below. There are rules about changing from one use class to another – sometimes planning permission is required, and sometimes a change can be made without planning permission. The rules are considered in more detail in the following paragraphs:

Planning law – use classes in England

The main classes for landlords to note are:

• Class B2 – industrial uses not covered in class E

• Class B8 – wholesale warehouses, distribution centres & repositories

• Class E – shops, restaurants, financial and professional services for visiting members of the public, indoor sports facilities, healthcare premises for visiting members of the public, day nurseries and day centres, offices, research and development uses and light industry suitable to a residential area

• Class F1 – learning and non-residential institutions including schools, museums & libraries

• Class F2 – local community shops, community halls, outdoor sports facilities & swimming pools.

Planning law – Use Classes In Wales

The main classes for property owners to note are:

• Class A1: Shops

• Class A2: Financial and professional services for visiting members of the public

• Class A3: Premises where food is sold and consumed on the premises

• Class A4: Public Houses, wine bars or other drinking establishments

• Class A5: The Sale of hot food for consumption off the premises (Take Aways)

• Class B1(a): Offices

• Class B1(b): Research and development uses

• Class B1(c): Light industry suitable to a residential area

• Class B2 – other industrial uses

• Class B8 – wholesale warehouses, distribution centres and repositories

• Class D2 – sport and leisure.

Permitted Use Clauses In Leases

Permitted Development use clauses (these are sometimes called user clauses) in leases often make reference to the classes of use in the Use Classes Order. A lease may define the Permitted Development use broadly, for example, “any use within class E(a)” for a retail use in England or “any use within class A1” for a retail use in Wales. Alternatively, a lease may specify a very particular use, for example, “as a post office”, and require the landlord’s written consent to any other use.

• Permitted Development Use of Commercial Premises
• Premises used for Shops and Professional Services in England
• Premises used for Shops and Professional Services in Wales
• Restaurant and Café Premises in England
• Restaurant and Café Premises in Wales
• Offices and Industrial Premises in England
• Offices and Industrial Premises in Wales
• Land in England
• Land in Wales

A GUIDE TO PERMITTED DEVELOPMENT RIGHTS IN 2021

What’s new in permitted development for 2021?

Permitted development (PD) rights are an alternative to full planning permission applications, but only apply strictly under certain circumstances when specific criteria are met.

Permitted development rights or PD rights, as they are commonly referred to, lay out a strict rule for anyone looking to make alterations without submitting planning applications, in specific circumstances. The most common example of this is a single storey, rear extension to a property that must extend to a maximum of 3 metres from the existing dwelling. Many people however forget, that the process must be signed off by a building regulations or building control officer who will make sure that the build has been completed to the current version of the building regulations at each stage.

In March 2021, Robert Jenrick, Secretary of State for Housing, Communities and Local Government announced a big change to PD Rights in England & Wales. On 1st August 2021 the government introduced the new Class MA change of use permitted development rights. A change that is expected to transform buildings and create huge opportunity for property entrepreneurs.

Class MA

Class MA offers a solution to our declining high streets in town centres by offering a new permitted development rights process for commercial to residential conversion. Whether it is retail buildings that have never recovered since the crash or offices that will never be filled again since the working-from-home trend, post–pandemic. These buildings and spaces offer a unique opportunity to meet the national housing crisis. Many investors and developers have the same problem, finding viable sites to build or convert into accommodation. Class MA opens the door to many of the disused properties previously only obtainable via a change-of-use planning application, with all its inherent risks.

All PD rights have clauses and restrictions and Class MA is no different. The restrictions for the use of Class MA extend to location, size and historic use and occupation.

Use Class E

Commercial buildings can only be converted to residential if they fall under ‘Use Class E’. In September 2021 a new way of classifying buildings came into effect.

The use classes of A1 (shops), A2 (financial and professional), A3 (restaurants and cafes) as well as parts of D1 (non-residential institutions) and D2 (assembly and leisure) are no longer individual use classes.

To make it simpler they have all been regrouped under use Class E. Under the new Class MA any Class E building can be converted into residential.

Size

Historically under permitted development rights the size of commercial building you could convert to residential was limited to a only 150sqm. However from 1st August 2021, under Class MA this increased significantly to 1,500sqm. To put that into perspective; that’s a regular 3-bedroom house increasing by a factor of 10.

Vacant Possession

It is important to stress that Class MA only applies to vacant buildings. You cannot have tenants in situ when you proceed with prior approval. The property must have beenvacant for a minimum of 3 months before this point. If you’re looking for commercial properties to develop now, you will need to make sure that you leave enough time for tenants to vacate and seek prior approval before buying the property. This may add to your finance costs.

Location

The location of the commercial property will ultimately decide if it can be converted using Class MA. The UK government implemented this caveat in the permitted development rights to stop developers from getting too carried away with the commercial to residential conversions.

Other locations such as areas of natural beauty (AONB) and Sites of Scientific Interest (SSSI) are included.

Opportunity Knocks!

Class MA PD rights are set to revolutionize the property sector, revitalizing the high street and meeting the demands of the housing crisis.  You need to act now and benefit from first-mover advantage ahead of the competition. There are many ways in which you can carry out your site finding, simplify your site assessment for feasibility with confidence and connect you to the owners of the best opportunities for making profit.

Planning Controls Article 4
Article 4 is a planning direction made by local authorities that remove permitted development rights.