On 7 October Howard Kennedy held an Economic Breakfast Briefing on the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 (SI 2020 No.757) (the "Amendment Regulations"), which were introduced by the government on 20 July to take effect on 1 September 2020. Jade Chalmers, our Director of Planning chaired the discussion and was joined by Joseph Daniels (CEO & Founder of the Project Etopia Group) and Aaron Peate (WSP).
Summary of the changes
In summary, the changes are as follows.
- From 1 September 2020, the following uses are to be treated as being included in the new Use Class E:
- E(a) – Display or retail sale of goods, other than hot food
- E(b) – Sale of food and drink for consumption (mostly) on the premises
- E(c) – Provision of:
- E(c)(i) – Financial services,
- E(c)(ii) – Professional services (other than health or medical services), or
- E(c)(iii) – Other appropriate services in a commercial, business or service locality
- E(d) – Indoor sport, recreation or fitness (not involving motorised vehicles or firearms)
- E(e) – Provision of medical or health services (except the use of premises attached to the residence of the consultant or practitioner)
- E(f) – Creche, day nursery or day centre (not including a residential use)
- E(g) – Uses which can be carried out in a residential area without detriment to its amenity:
- E(g)(i) – Offices to carry out any operational or administrative functions
- E(g)(ii) – Research and development of products or processes
- E(g)(iii) – Industrial processes
Planning permission from the local planning authority ('LPA') will not be required for a change of use within Use Class E.
Uses B2 and B8 remain valid. Uses A4 and A5 are not covered by the new Class E and become defined as ‘Sui Generis’.
Class C is not affected by the 1 September 2020 changes.
For any planning applications submitted before 1 September 2020, the Use Classes in effect when the application was submitted will be used to determine the application.
For any reference to Permitted Development rights, and for restrictions to them or applications for Prior Approval, the Use Classes in effect prior to 1 September 2020 will be the ones used until the end of July 2021 (this is defined as the ‘material period’ in legislation so may be referred to as such).
Let the developers take control
The main advantage of the Amendment Regulations is that they will allow developers/land owners to bypass the requirement for planning permission when switching between the use classes that will now form the new Use Class E. This could allow high streets to be more versatile and provide mixed use sites that reflect flexible consumer activities.
In the Howard Kennedy Economic Breakfast Briefing, Joseph Daniels noted that he believes the evolution of mixed-use spaces reflects the innovative and flexible attitude of the younger generations. He views the new Use Class E as being the 'WeWork for the planning and retail space', whereby versatile and varied uses of a site allow both consumers and landlords to maximise their use of real estate.
Reality check
Whilst the Amendment Regulations have been hailed by some developers as a deregulatory step towards more creative uses of land, it is important to consider what the Amendment Regulations in fact do not do, or prohibit.
You will still need planning permission to make external alterations to buildings to facilitate any change of use. Where planning permission is still required, LPA's may well scrutinise applications in much more thorough fashion than before. More onerous conditions could now be a product of this intensified scrutiny, as LPA's seek to wrestle back control over local areas from developers.
In the Howard Kennedy Economic Breakfast Briefing, Aaron White also noted that developers should also consider that some popular leisure uses such as hot food takeaways and drinking establishments are now categorised as 'sui generis', which requires planning permission to be obtained before a site can be used for any of these purposes.
This may come as a disappointment to commercial developers who are aware of the popularity of such use classes, which have been in increasing demand in recent years as the UK's 'pop-up' scene was valued at over £2.3 billion before the COVID-19 pandemic struck.
Legal considerations
Developers also need to be aware that the changes to the Use Classes Order do not override planning permissions and section 106 agreements, which still govern the use of a site. It may be that there are restrictions in an extant planning permission or section 106 agreement that restricts the use of the land in question, despite it now falling within the new Use Class E.
For example, where the developer may have planning permission for an A1 shop use, there may be contained in that permission a condition that restricts a change of use without first obtaining planning permission. The developer will not be able to change from the A1 shop use without a variation to the extant planning permission, and such a variation will in itself contain its own set of conditions.
Other restrictions on planning uses can be found in commercial leases and other property documents which will need to be carefully reviewed to consider whether a change of use is permitted without consent. Going forward, tenants who are commercially reactive to changing consumer habits will no doubt push for a wider permitted use clause so that they can be flexible with the property that they have leased.
The Future
The bypassing of the requirement for planning permission means that, at least in this regard, LPA's will have less control over what they think the high street should look like. Market forces could now have a stronger hand in determining what happens to retail spaces in the post COVID-19 world.
In the Howard Kennedy Economic Breakfast Briefing, Joseph also noted that LPAs may not be ready to fully understand all flexible property uses that arise from the Amendment Regulations, due to the engineering innovation that may be required to implement these uses. Aaron noted that the system of control that is spread between developers, LPAs and local communities is there to create a fair system of checks and balances whereby market opportunism and pragmatic needs are balanced.
Legal environmentalist group Rights: Community: Action ('RCA') sought to judicially review the Amendment Regulations and two other statutory instruments granted by the Secretary of State for Housing, Communities and Local Government. The application was listed for a one and a half day hearing between the 8 and 15 October 2020. In a judgement handed down on 17 November 2020, Lord Justice Lewis dismissed the claim for judicial review. It remains to be seen whether RCA will appeal this decision.
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