In the late summer of 2020, the government released some radical changes to the planning system.
They may have been under the radar with Covid-19 changes taking the spotlight, and with further changes through the White Paper and the government’s aim to “build, build, build” it’s way through the issues and economy.
However, these two changes are potential game-changers.
The Property Management Perspective
This is a whole separate area of the property industry with tonnes of technical information to understand and apply (the main government details here).
If you’re involved in property development and even the sales and letting of properties, you will become more involved. Well, as much as you can do before solicitors and planning experts do.
If you’re involved in the more day-to-day property management, or certainly the value-enhancing asset management, you tend to need a more general awareness of the issues and how this will affect property occupation, values, and services.
The focus tends to be more on the commercial property side, particularly with the government’s drive for businesses and the economy to be back in action after the current pandemic and lock-down issues.
However, this can and does involve residential, specifically the conversion of commercial property to residential flats, for example.
Change #1 – Permitted Development Rights
In short, there are situations wherein principle planning permission is already deemed to be given without needing to issue a full planning application.
This is through the GPDO (General Permitted Development Order), with the last big overhaul in 2015 with other tweaks now coming in 2020.
However, you still need to notify your Local Planning Authority as there may be Prior Approval matters to confirm with them. They’re not as serious as a full application and designed to be issued quicker within 56 days.
Individual authorities can also issue variations within their area through what they call Article 4 directions.
Also, they miss out other financial contributions towards the area through say CIL and section 106 agreements and affordable housing contributions as with full applications.
In terms of what they include, here’s a few keys ones:
• Temporary allowance for cafes and restaurants to provide a takeaway service between March 2020 and March 2021 under the Covid-19 pandemic.
• Conversion of offices to residential uses
• Small retail units to café uses
• Additional stories for residential blocks
• Vacant commercial buildings can be redeveloped into residential.
Change #2 – Use Class Order
Within the planning world, the way in which a property is used can be within set groups which don’t, therefore, constitute development and required planning permission.
Up until 2020, there were four basic categories of use:
• A for forms of retail and basic offices
• B for other offices, and industrial
• C for forms of residential accommodation and living
• D for community and other uses.
There's a good link here in terms of how these have now changed and moved into two more categories E and F.
To keep more broad-brush, here are the main takeaway trends to note:
1. The new E class mops up most of class A1 to A3 (except some former A1), the bottom B1 for more the offices' end of industrial, and some connected ones from D.
The good news is that everything is swamped into this class with subdivisions, the aim being to encourage a greater change of uses from now on.
Strategically this may cause people to apply for this with one end of the spectrum being in mind, for example, a medical centre on the edge of town; but when secured, bringing in say other retail shops.
2. The top-end of A4 and A5 are placed in the Sui Generis class, which is basically stand-alone ones requiring unique planning permission.
These are takeaway and pub/restaurant uses, with the government wanting to make these harder to bring in.
However, as well as difficulty in new uses being first successfully applied for, existing uses will now need permission to get back out to everything else, whereas before they had the ability to down-grade to other A uses.
3. A new F class takes on the remaining ones from the D class and the small A1, split between F1 and F2 (with some in D2 also going into Si Generis).
This is a form of tidying-up of these remaining uses.
4. Class C remains basically the same, and the rest of class B with just some slight tweaks, remain the same.
Therefore no great changes here.
It’s also worth noting that the previous General Permitted Developments did include changes within different use classes, and there are transitional arrangements until the summer of 2021 (plus presumably future ones afterwards to help micromanage effective transfers between the new ones).
Also, any use class changes won’t override any existing restrictive planning conditions. If they said such-and-such business use can not be there, then even if included with the new E class, it won’t be allowed in that particular situation.
The Three Property Management Factors
Taking a step back and a wider property management perspective, here are three key issues to be aware of regarding these planning changes.
They’re deliberately more general and looking at the knock-on effect of how properties are managed and maintained, not necessarily the technicalities of understanding or procuring each one.
1. The Leases in Question
For properties which are let with a lease in place, this can be easily overlooked.
No matter what the local planning permissions and allowances are – the lease may say something different.
Plus, even check any restrictions on using the land with the registered title, for both proposed sales and lettings.
Therefore, the lease always takes over; after all, it’s a contract that both parties have agreed.
However, where the lease can allow something, you must still have planning permission for this which is the wider control of development and property changes.
In terms of what to check in a lease, the user clause is key.
So, new planning classes may allow different business and retail uses into one E class. Still, a lease may be restrictive and say that only a travel agent can occupy the property.
And to make matters worse, even if this can be changed with the landlord’s permission, they don’t have to be reasonable in granting this unless stated as so.
Where leases have a use related to the planning system – so maybe A1 use – then an interesting question is whether this will allow wider uses that fall within the E class that this A1 class falls within.
Also, check out the other clauses and sections in a lease regarding planning permission, as these can be restrictive.
A tenant may well have to not only inform a landlord about any planning application they make but forward all notices received even for say neighbouring properties.
Even the prior approval matters under permitted development rights may well need to involve the landlord.
2. The Applications Involved
You then have the practical planning application to process, often very complicated, expensive, and timely.
When you’re managing properties, always remember that this is really a completely different service that a specialist should look into. Or if a
Property Manager does have the expertise and will to do them, to agree to an additional basis for this.
Whoever does it, though, will often affect the property management of the property. For example, arranging inspections, looking for plans if files, or liaising with related parties and neighbours.
Plus, see if this is worth progressing with now before it’s even required.
For example, you might be able to re-let a retail unit to a similar hairdresser as before, however, considering applying for other uses like a takeaway at just the right time to take effect for any future expected vacancy and re-letting.
It’s also worth noting that even where full planning permission is not required, there may still be work needed.
Even Permitted Development Rights may require careful looking at Article 4 restrictions with the Local Planning Authority and seeking Prior Approval of detailed matters.
These may also be refused just as with a full application, with further delays and costs of a planning appeal.
Even if you have a certain new use that is now authorised, seeking a Certificate of Lawfulness mat still be prudent.
Which again, all has a knock-on effect with the property management of the property.
A final thought here longer term is how these use class changes will affect general planning policies and conditions going forwards with granting applications.
Existing development plans etc. that planning authorities work from will have the land use classes in here, therefore bring in say a wider E class could cause all kinds of other business uses in other geographical areas not originally planned for.
3. The Details at the Property
We then get down to the property's practical issues to accommodate any new uses or physical changes as part of the new planning status.
Right off the bat though, this needs to be differentiated from Building Regulations which people often get confused with.
These regulations are about the quality of the works to the property through building control, so maybe the amount of insulation or types of new fire escapes for certainly planned refurbishment, all through a completely different department of the Council.
This is also separate to any Council Tax or Business Rates issues, or other departments like Highways.
In this context, it’s all about what change you need to make through the property through the planning system.
There may be planning conditions that are granted with any permission.
Or even with Permitted Developments, it’s the detailed issues that will need a final rubber-stamp from the planners to get passes through, for example:
• Flooding, sewerage and drainage issues (particularly say an old office block being changed to many residential units with greater demand for)
• Refuse, waste removal and contamination.
• Transport, parking, and highways implications
• Noise levels – both from and to the neighbours
• Ventilation, extraction, and heating and cooling provisions
• Hours of operation
• Additional long- and short-term storage
Plus, don’t forget the services and compliance issues at a property which can later develop into expensive and deal-breaking ones.
So, for example, how utility supplies are provided, split and charged for.
Or looking at the fire strategy and systems at the property, including compartmentalisation levels, fire escape routes, and detection systems.
Planning for Planning Changes
Although the true effect and details of these changes will come through in time, it’s important to grasp the fundamental points and consequences to these now.
The underlying aim is to encourage greater flexibility in the way buildings are used, extended, and improved for evolving businesses and residential uses in our modern world – with less red tape from the planning system.
Therefore, property developers and investors need to take note of the opportunities for increased property values. And tenants and occupiers wake up to how existing and new locations can now stack up.
However, watch out for the detail.
Realise how leases and other legal documentation can both help and hider this. Then, the process and issues still involved in the implementation and application of these planning changes.
Plus, don’t forget the knock-on effect on how the property is maintained and serviced; where good property management pays dividends.
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