On 21 July 2020, the UK Government laid before Parliament new regulations that, if enacted, will radically overhaul the English Planning System. Changes to permitted development (PD) rights were also announced on the same day.

Streamlined system

The Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 (“UCO”) will streamline the existing 16 Use Classes into 11 by introducing three new broad Use Classes.

This means that from 1 September 2020 planning permission will not be required for change of use within the new broader Use Classes unless explicitly stated, making it easier for businesses and landlords to adapt to the changing demands of the high street.

Furthermore, the new UCO also introduces the notion of a “part use”, allowing a change of use of part of a building, use or planning unit to an alternative Class E use without permission.

Class E -A new single Commercial, Business and Service Use Class known as E which, as well as subsuming the existing A1, A2, A3, B1 and selected D1 and D2 Use Classes which includes retail, food, financial services, indoor sport and fitness, medical or health services, nurseries, offices and light industry, Class E will also include a new category of ‘other services which it is appropriate to provide in a commercial, business or service locality’. This is expected to comprise uses such as travel agents and post offices which were previously classified within Class A1.
Class F1 - A new Learning and Non-Residential Institutions Use Class, known as F1, embraces the remaining parts of the existing D1 Use Classes that are not included within the new Class E. This will include education, non-commercial galleries, law courts, libraries, museums, places of worship and public halls.
Class F2 - A new Local Community Use Class, known as F2, will comprises part of the current A1 and D2 Use Classes and includes small corner shops, local community halls, outdoor recreational areas and swimming pools.
Sui Generis - Pubs, wine bars and other drinking establishments, drinking establishments with expanded food provision , hot food takeaways, live music venues, cinemas, concerts, bingo and dance halls are added to the list of sui generis uses so a change from one to another would require planning permission if there is a material change in use. There are significant potential uncertainties with this, for example, what the difference between a restaurant and a ‘drinking establishment with expanded food provision’ such as a gastropub might be. Consequently there could be a rise in disputes over such matters.
Other Use Classes - Use Classes C (residential), B2 (general industrial) and B8 (storage and distribution) remain unchanged in all material respects.

Timetable

Transitional provisions will ensure that buildings or uses will continue to be subject to any existing PD rights in force on or before 31 August 2020. These provisions will remain in place until 31 July 2021 when revised PD rights will be introduced. The changes subsequently come into force on 1 September 2020 although there is a material period from 1 September 2020 to 31 July 2021, during which time references to uses and use classes in the General Permitted Development Order will remain as presently defined in the current UCO. This will allow a transition period where applications for prior approvals in the material period under existing PD rights will be assessed against the current UCO.

For live applications for planning permission submitted before 1 September 2020 which refer to uses or use classes in the current UCO, they must be determined by reference to the old use classes. Once implemented, nevertheless, in the absence of controls in the permission such uses may fall within the new classes for the purposes of the revised UCO.

From 1 September 2020 applications will be capable of seeking permissions that specify the new classes within the revised UCO.

Restrictive conditions

On the face of it these changes are a radical step that will be welcomed in many quarters. The Government has said it wants the use updated UCO to better reflect the diversity of property usage on high streets and in town centres to give businesses and landlords the flexibility to adapt and diversify to meet changing demands. Despite this stated focus, the changes are not limited to town centre locations but will affect and deliver flexibility for any buildings within the relevant uses wherever they are in England.

Whether these wider commercial and business definitions achieve the intended full flexibility remains to be seen as local planning authorities may seek to use existing tools to limit flexibility including the use of planning conditions to restrict PD rights. While conditions restricting the future use of PD rights or changes of use may not pass the test of reasonableness or necessity this is likely to be a point of contention. The scope of assessment work required to support applications that seek full flexibility may also need to be established where applicants are keen to avoid such conditions being imposed.

Where applications seek an open Class E use then there may also be challenging issues around the extent of planning conditions and S106 obligations required to control the potential wide-ranging impacts. In practice this may mean that applicants seek to simplify the process by applying for permission for a single or flexible use involving one or more of the uses within Class E which would, once implemented, benefit from the flexibility to change within the other Class E uses.

Where local planning authorities are keen to retain controls and limit the flexibility of changes the practice of using Article 4 Directions is not an option to limit changes within the same class as, under the new UCO, these are not development. The use of restrictive conditions is therefore more likely to be favoured in these circumstances, provided that the necessary tests are met.

Impact on CIL

Granting permission for an open Class E use would also raise issues around the appropriate community infrastructure levy (CIL) rate. Numerous CIL charging schedules define their rates based on the current use classes and it is not clear whether these would need to be reviewed. Local planning authorities will need to assess how the changes interact with their charging schedules and where there are issues this may impact on the ability of developers to determine accurate estimates of CIL liability. The requirement for clarity over the uses, pertinent to the charging schedules, could also see an unintended rise in planning conditions that restrict the future use to a specific definition, which could reduce the intended flexibility.

Missed opportunity

The proposed changes also appear to have missed a trick in recognising the rapid growth in popularity of Build to Rent (BTR) or Private Rented Sectors (PRS) through the creation of its own asset class in order to distinguish it from more traditional housing schemes; something we lobbied Government for back in September 2017 following the launch of our inaugural ‘Build to Rent: Reaching out to the Regions’ research report.

If BTR or PRS development held its own use class it would simplify the planning system and further strengthen investors’ and institutions’ appetite for this high-growth product without getting caught up in wider housing planning matters. It would also allow BTR, which is markedly different to low density housing models, to be focused on town centre regeneration.

Next steps

As is often the case with any new procedures or definitions there will be a period of settling down while both applicants and local planning authorities seek to ascertain the likely impacts and potential strengths, weaknesses, opportunities and threats. We are continuing to monitor these and will provide further updates in due course.

In the meantime, should you have any queries or wish to discuss the implications on your property or emerging plans please get in touch.

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