Fundamental Use Class shake-up in England

Last month, as part of his “Build Build Build” agenda, the Prime Minister indicated that the Government would reform The Town and County Planning (Use Classes) Order 1987 (as previously amended) to provide “total flexibility” of use for the majority of commercial premises by removing “unnecessary red tape“. The Government objective is for a greater diversity of uses on high streets and within town centres and to allow businesses the flexibility to adapt and diversify to meet changing demands - the CORONAVIRUS outbreak has simply escalated the need for such flexibility.We have seen changes to the Use Classes Order before but the proposed changes are comprehensive and will come into effect on 1 September 2020.Please see our summary table of the changes here.

What do the new regulations seek to do?

These new regulations seek to amend and simplify the use classes system in England by:

• Revoking Parts A and D of the existing Use Classes Order (i.e. Classes A1, A2, A3, D1 and D2);
• Creating a new Class E: "Commercial, business and service";
• Creating a new Class F1: "Learning and non-residential institutions" and a new Class F2 "Local community"; and
• Expanding the number of uses classed as "Sui Generis".

The new broad 'Commercial, business and service" use class (Class E) will in essence amalgamate the previous separate use classes of:

• A1 - Shops;
• A2 - Financial and professional services;
• A3 - Café / Restaurant;
• B1a - Offices;
• B1b - Research and Development Buildings;
• B1c - Industrial processes (which can be carried out in any residential area without causing detriment to the amenity of the area) (i.e. light industrial);
• Part of D1 - Clinics, health centres, crèches, day nurseries, day centres; and
• Part of D2 - Gymnasiums, indoor recreations (not involving motorised vehicles).

The Government have indicated that the new Class E allows for a mix of uses to reflect changing retail and business models by recognising that a building may be in a number of uses concurrently or that a building may be used for different uses at different times of the day so will enable business to "be able to respond and adapt quickly to changing circumstances and demands" without the need to obtain planning permission. The extent of flexibility proposed is particularly significant given that planning permission is not generally required to move between uses in the same class. However, given the range of uses within Class E there are circumstances whereby local planning authorities or objectors may allege that a change of use has occurred by virtue of intensification i.e. activity, noise, vehicle movements etc. Buildings/land in use on 31 August 2020 as shops (A1), financial and professional services (A2), restaurants and cafes (A3) or business (B1) will automatically be treated as Class E on or after 1 September 2020. No similar provision is made for the applicable D1 and D2 uses which would now fall within Class E. The new classes F1 'Learning and non-residential institutions' and Class F2 'Local community' The new regulations also create new 'Learning and non-residential institutions' (F1) and 'Local community' (F2) use classes. The Government want to ensure that those uses which are "important to local communities" can be protected through the planning system so sit within less broad use classes. The 'Learning and non-residential institutions' use class (F1) incorporates some of the uses from the former D1 Non-residential institutions use class which are more likely to involve buildings which are regularly in wider public use such as schools, museums, libraries, religious buildings and art galleries. The 'Local community' use class (F2) groups together some of the uses from the former D2 use class which provide for group activities of a more physical nature - swimming pools, skating rinks and areas for outdoor sports. Significantly the new class also recognises the importance of small, local shops in meeting the day-to-day shopping needs of local communities so includes shops mostly selling essential goods including food in local communities where the shop's premises cover no more than 280 sq m and there is no other such facility within a 1km radius of the shop's location.

Expansion of the catch all "sui generis" use class - i.e. they are in a class of their own 

The former A4 (Drinking Establishments), A5 (Hot food takeaway) and former D2 uses of Cinemas, Dance, Concert and Bingo Halls are now specifically classed as "sui generis". Uses which are "sui generis" generally cannot change to any other use, including other "sui gerneris" uses without obtaining express planning permission.The Government has taken this step to ensure that local pubs and other community facilities can be protected and to prevent the proliferation of hot food takeaways. However, of course there is nothing to prevent a planning application for a change of use to be submitted to the relevant local planning authority.It is unclear whether a mixed restaurant and takeaway use, which has been pushed by the Government during the Coronavirus outbreak, would fall within Class E or be considered "sui generis".

Unaffected classes

The general industrial (Class B2), storage and distribution (Class B8), and residential (Class C) use classes remain materially unchanged.

Transitional and saving provisions

A building or use will continue to be subject to any permitted development rights that it was entitled to on or before 31 August 2020. These transitional provisions will remain in place until 31 July 2021 when new, revised permitted development rights will be introduced. These saving provisions also apply to relevant Article 4 Directions.

What's the impact?

Pretty fundamental...potentially. Given the breadth of the new Class E, the changes could lead to the creation of a less diverse high street with occupiers and landowners seeking to focus on the most profitable uses, the creation of more mixed "day-to-night" uses alongside more "experience led" uses. The Government's laissez-faire approach and creation of Class E is simply going to exacerbate the speed of change we have already seen on our high streets, but we would query how sustainable this may be in the longer term. Practically, local planning authority planning policy is also going to have to adapt or be left behind. Historically there has been a great deal of resistance to "out-of-centre" retail due to supposed negative impacts on "in-centre" sites. However, we note that the new Class E does not currently differentiate between "in-centre" and "out-of-centre" sites meaning that redundant "out-of-centre" offices, light industrial, gyms and health centres could become retail, or other Class E uses without the need to obtain planning permission without any control mechanism by the relevant local planning authority i.e. via retail impact, the sequential test and highways. Practically many "out-of-centre" buildings may not be suitable for direct conversion to a different use within Class E without having to apply for planning permission, however, the expansion of the class creates a valid "fall-back" position which will have a significant impact on any future planning application of this nature.However, it is worth remembering that greater flexibility in the Use Classes Order does not mean that you can just go-ahead. We recommend that anyone looking to take advantage of these changes seeks legal/planning consultancy advice before doing ahead due to the risks of planning enforcement action, including if there:

• Are any restrictions within the existing planning permission(s) and associated section 106 planning obligations;
• Is any current/historic enforcement action;
• Are any applicable Article 4 directions;
• Is any need for listed building consent;
• Are any external works to facilitate to change of use which would require planning permission;
• Signage/advertisement consent;
• Building regulation requirements; and
• Any restrictions on use imposed in the title documentation, including any lease.

We will have to see if the government plugs the issues we raise above and it may well be beneficial for property developers and owners to re-evaluate current planning applications after the change. From a transactional point of view property developers and owners should also check their contracts to ensure that they cater for the change. We will need to wait until September to see how these changes are practically implemented but we consider that they will be significant and we recommend that you start considering the impact on your portfolios and development proposals to work out what opportunities this could bring. Our expert team of chartered town planners and planning lawyers are here to help with this. Please do in get in touch.

Email a member of the team: Authors

• Paul Brailsford
• Robert Bruce
• Mark Harris
• Darren Williamson

Co-authors

• Stephanie Gozney