Planning matters blog | Lichfields

Planning matters

Our award winning blog gives a fresh perspective on the latest trends in planning and development.

New Class MA - Mercantile to Abode: a slightly reined in Class E commercial to residential PDR from August 2021
Background In December 2020, the Government began a consultation on a variety of changes to permitted development rights. At the core of the “Supporting housing delivery and public service infrastructure”[i] consultation were proposals responding to the need for amendments to permitted development rights, following the September 2020 abolition of use classes A1-A5, B1, D1 and D2, the introduction of new classes E, F.1 and F.2 and the movement of further uses outside of a use class and thus sui generis. The change of use permitted development right most fleshed out in the consultation was a proposed Class E to Class C3 (residential) permitted development right. The outcome of several elements of that consultation have now been published and the associated amendments to the Town and Country Planning (General Permitted Development) (England) Order 2015 (GPDO) have been laid before Parliament in the Town and Country Planning (General Permitted Development etc.) (England) (Amendment) Order 2021.  Tom Davies' blog looks at the amendments to permitted development in that Order related to ports and public service infrastructure (hospitals, education and prisons) that will come into force on 21 April 2021. New Class MA This blog considers the new Class MA business and commercial to residential permitted development right (PDR) introduced by that Order, which will replace and introduce certain commercial to residential PDRs, from 1 August 2021. To be clear, classes M, MA and O are classes of permitted development within Part 3 of Schedule 2 to the GPDO, whereas other classes mentioned in this blog are use classes defined in the Use Classes Order 1987 (as amended) (see the Lichfields Guide to the Use Classes Order). New class MA will be a different beast to the current retail and office to residential PDRs, with several different limitations and conditions. It is important for developers to consider the differences between the old and new business and service to residential PDRs in order to decide - for former A1, A2 and B1(a) use classes - whether or not to submit an application for prior approval before or after 1 August 2021. Our summary table provides an overview of the key differences between the current and proposed business and service to residential PDRs. This shows that the new, broad, permitted development right will actually reduce the scope of office to residential permitted development while increasing the scope of retail to residential PDRs and introducing new PDRs for other typically main town centre uses to change to residential. In essence, the Government has reined back the proposals consulted on by adding floorspace limitations, vacancy and location limitations, having reflected on the consultation responses it received. And as with the permitted development rights for additional storeys to provide new dwellings, introduced in summer 2020, the bold press releases are not inaccurate, but do not flag the hurdles to be overcome before utilising these permitted developments becomes a viable option. Notwithstanding, Class MA, which will allow very many properties within Class E to change to residential without consideration of impact on the High Street if the proposal is outside of a conservation area and limited consideration if it is within, will be among the most significant planning changes in a generation. Only listed buildings and their curtilage and properties in the most sensitive locations such as World Heritage Sites, National Parks and Areas of Outstanding National Beauty will be excluded from the new PD right. The legislation precludes or requires assessment of loss of retail and office in beautiful and heritage locations, but in no other retail or business destinations. The retail assessment required by the current Class M PD right will fall away. Delivering housing and the reuse of redundant shopping space are known to be the Government's priority and the Class MA permitted development right emphasises this. Overview of Class MA Which PD rights are to be replaced by the new Class MA? From 1 August 2021 Class MA will: Replace Class O office to residential Partially replace Class M retail to residential (partially because Class M currently permits change of use to residential from uses not within Class E, e.g. take-aways, betting offices, pay day loan shops and launderettes, as well as from A1 and A2) Class PA – B1(c) light industrial to residential - has already fallen away, at least for the moment. Which pre-September 2020 former use classes fall within Class E and will benefit from the Class MA PDR? Subject to limitations and conditions, former uses classes Class A1 (shops); Class A2 (financial and professional services); Class A3 (food and drink); Class B1 (business); Class D1(a) (non-residential institutions – medical or health services); Class D1(b) (non-residential institutions – crèche, day nursery or day centre) and Class D2(e) (assembly and leisure – indoor and outdoor sports), other than use as an indoor swimming pool or skating rink, will benefit from the Class MA PDR. This means that Class E buildings or planning units that formerly fell within Classes A3, D1(a), D1(b) or D2(e), will benefit from permitted development rights to change use to residential that they did not benefit from before, provided Class E limitations and conditions are met and there are no restrictive conditions. Is there a limit on the size of building to which the PDR applies? Yes. The permitted development right does not apply if more 1,500sqm of cumulative floorspace is to be converted. This is significantly more than the 150sqm permitted under Class M retail to residential at present, but a significant new restriction for office to residential change of use via permitted development. This limitation also did not feature in the original consultation and was introduced in response to the consultation on the new permitted development right. Converting only part of a building is permitted, so the building may be bigger than 1,500 sqm. The Explanatory Memorandum says at paragraph 7.7: “No more than 1,500 sq m of floorspace in any building may change use. Part of the building may change use under the right, including where the lower floors are in Commercial, Business and Service use and the upper floors residential”. Given that the floorspace of most retail premises within town centres is below 1,500 sq.m, this limitation excludes very few of such premises from the new permitted development right, but many small shop units may be under the minimum space standard for residential use. Does new Class MA apply to all Class E buildings/planning units of 1,500sqm or less? No. There are also limitations relating to the location of the development, longevity of existing use and vacancy. Article 4 Directions removing Class O permitted development rights will continue to apply until 31 July 2022. The inference is that Article 4 Directions removing Class M permitted development rights for change of use from former use classes A1 and A2 will fall away. However, there are transitional and saving provisions relating to Article 4 Directions at Regulation 3 of the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 and the Explanatory Note to those Regulations says: "regulation 3(4) provides for references to uses or use classes in article 4 directions which have already been made to continue to be construed as the previous use classes". There may also be restrictive planning conditions or legal agreements that prevent change of use via Class MA. In which locations does the Class MA PDR not apply? The PDR does not apply in certain designated areas. For former class A1 and A2 uses the Class MA PDR is less restrictive than current Class M, because Class MA applies within conservation areas where Class M does not. But there will more limitations on the locations that will be able to benefit from office to residential PDRs than there are at present. Class MA does not apply in a site of special scientific interest, an area of outstanding natural beauty, an area specified by the Secretary of State for the purposes of section 41(3) of the Wildlife and Countryside Act 1981 (enhancement and protection of the natural beauty and amenity of the countryside), the Broads, a National Park or a World Heritage Site -  Class O applies in these areas and Class M does not. As with the Class M and Class O PDRs, development is not permitted by Class MA if land covered by, or within the curtilage of, the building is or forms part of a safety hazard area or a military explosives storage area; a listed building or land within its curtilage and/or a scheduled monument or land within its curtilage. What are restrictive planning conditions? There may be a condition on a planning permission for an existing use or development that seeks to prevent change of use to other uses. The extent to which such a condition would prevent a building or part of a building from benefiting from Class MA would need to be considered on a case by case basis. As noted above, legal agreements should be checked too. What is the longevity of existing use limitation? To benefit from Class MA, the use of the building must have fallen within Class E or one or more of the uses that it replaced for at least two years continuously prior to the date the prior approval application is made. This limitation was introduced in response to the consultation outcome and did not feature in the original consultation. The legislation is not clear on whether the building must have been in the same use or mix of uses for the two year period, but the Explanatory Memorandum suggests not. It says that “the building must have been in Commercial, Business and Service use for two years before benefiting from the right […] time served in the uses in former use classes now within the Commercial Business and Service use class […] will count towards this period”. It is possible that planning units that were once in a sui generis mix of uses now together fall within class E (e.g. shop and café where the café is not ancillary).  Similarly, where uses such as beauty salons might now be considered within class E, they were not always considered to fall within class A1. Therefore, the implications of the longevity test for such buildings and planning units formerly considered sui generis, but now in Class E, may need some consideration. The longevity test is intended to prevent “gaming”, but giving how wide-ranging Class E is, one wonders what gaming might have taken place to have a lawful Class E use for less than two years purely with a view to obtaining planning permission for residential? What is the vacancy requirement? The building must have been vacant for a continuous period of at least 3 months immediately prior to the date of the application for prior approval. This is another limitation that was introduced in response to the consultation outcome and did not feature in the original consultation. Periods of closure as a result of Government Covid-19 restrictions will not count towards the vacancy period where the building continues to be occupied by the owner or tenant. A prior approval application can be made to change the use of part of the building only. The vacancy test applies to the building, but as the definition of a building in the GPDO relates to part of a building this might mean the vacancy test is only required for the part of the building to be converted. Certainly this would be the most sensible interpretation in order to make the best use of land. The requirement that building must have been vacant for a continuous period of at least 3 months immediately prior to the date of the application for prior approval suggests that the building can be brought into use after the prior approval application has been submitted. Are the prior approval matters for Class MA broadly the same as for Class M and Class O? All prior approval matters are carried over from Class O, and of these matters the following are also Class M prior approval matters: transport and highways impacts of the development, contamination risks, flooding risks and the provision of adequate natural light in all habitable rooms of the dwellinghouses. Three new prior approval matters will be introduced relating to loss of certain social infrastructure, agent of change and impact on conservation areas, which will not be relevant to all schemes. A key change arising from Class MA will be the loss of a prior approval matter considering the impact of the loss of retail, which is currently required under Class M. This becomes more of a glaring omission given that one of the new prior approval matters requires the impact of the loss of nurseries and clinics to be considered (where relevant). In a conservation area and where the change of use is at ground floor level, the impact on the character and sustainability of the conservation area is another new prior approval matter. Addressing this matter could potentially include a limited assessment of retail impact. There are two agent of change prior approval matters – one requires consideration of the impacts of noise from commercial premises on the intended occupiers of the development, which is already a Class O prior approval matter. A new prior approval matter requires consideration of the impact on intended occupiers of the development of the introduction of residential use in an area the authority considers to be important for general or heavy industry, waste management, storage and distribution, or a mix of such uses. How local planning authorities are to determine what is an important area for such uses is potentially open to interpretation. The Class M external appearance and design prior approval matter does not feature in Class MA, but nor does the ability to obtain prior approval for operational development reasonably necessary for conversion to residential – so that prior approval matter is no longer relevant. Procedure for applications for prior approval under Part at Paragraph W the same? There will be minor changes that affect all prior approval applications under Part 3. Firstly, the total floor space in square metres of each dwellinghouse must be shown on the plans. Secondly, the local planning authority must now serve notice on any owner or occupier of the other part or parts of the building, where the application relates to part of a building. What about the need to meet space standards? The requirement to meet space standards will come into force on 6 April 2021, through an amendment to Article 3 of the GPDO. From that date, Article 3 will state that the GPDO does not grant permission for any dwellinghouse that would be less than 37sqm or would not comply with the nationally described space standard. Therefore, this new requirement will apply to current Classes M and O and all other classes of permitted development that permit dwellings, including Class MA once in force. What will the application fee be? £100 per dwellinghouse, up to a maximum fee of £5,000. This is a significant rise from the current £96 total fee (the fee for change of use only, under Class M, is £206 if operational development is proposed too). According to the Government, “this strikes a balance between supporting local authority resource and encouraging future development”. Can prior approval still be sought under Classes M and O? Yes. Valid prior approval applications must be submitted on 31 July at the latest. And for the moment, Class M can be used after 31 July 2021 for uses that benefit from this PDR and do not fall within new Class E (e.g. take-away to residential). However, it is anticipated that different Part 3 (permanent change of use) permitted development rights relating to other now obsolete use classes (such as Class A5 take-aways) will be in force by 1 August 2021. According to the Supporting housing delivery and public service infrastructure consultation outcome, the Government will undertake a technical consultation on each Part 3 permitted development right that is to be amended or replaced. [i] The Lichfields planning news story on that consultation:  


Tubthumping: knock down and rebuild permitted development rights
Office to residential permitted development, now in its seventh year, has been effective at swiftly converting office space to residential space. It has also been accompanied by widespread concern at the quality of some dwellings, the loss of office accommodation. Rates of take-up have slowed significantly as the most obvious sites have already been converted or developers have obtained a prior approval that provides a fall-back position for an alternative planning application. Enter stage right a new permitted development right (PDR) to demolish a vacant office, light industrial or residential buildings and redevelop the site for a residential building.  This potential right has been suggested by the various Governments several times since October 2015[i], most recently in ‘Planning for the Future’, as a ‘tub-thumping’ ‘ripping up the rule book’ measure.  It appears MHCLG officials have been plugging away on a PDR secured by prior approval that can been drawn tightly enough to address the concerns of Tory opponents.  This is all the more important given the ‘Building Beautiful’ agenda – albeit knock down and rebuild has finally emerged in the context of the new favourite alliteration of Bs: Build Build Build. This PDR, which inserts Part 20 Class ZA into the Town and Country Planning (General Permitted Development) (England) Order 2015 (GPDO), is one of six that will come into force during August. On 1 August the PDR for additional storeys to wholly residential blocks (Part 20 Class A) will come into force. This Class ZA PDR and further new PDRs to add storeys to extend dwellings (Part 1 Class AA) and to add dwellings to certain buildings (Part 20 AA-AD) will come into force on 31 August. An overview of the knock down and rebuild PDR follows. This long-awaited PDR was thought by some to be impossible as it represents such a step change from the scale of development permitted by other PDRs relating to residential development. Will there be a huge take up? There are potentially 13 prior approval matters to be addressed; the application drawings and documents will look very similar to a planning application. The fee will be around two thirds of a planning application fee. Many prior approval applications for change of use to residential have been implemented, but prior approvals are also often used as a fallback position for a scheme that requires planning permission. The costs involved in bringing forward a prior approval for knock down and rebuild means that they are less likely to be submitted unless a viable scheme that the developer would like to build out is proposed. Where a compromise is needed in order to comply with the PDR – for example extending beyond the footprint of the building to be demolished – express planning permission may be sought instead. What will this new PDR provide? New Part 20 Class ZA grants planning permission for demolition of certain detached purpose-built blocks of flats or detached Class B1 office, research and development or light industrial buildings (or a combination of both) “the old building” and the construction of either a detached purpose-built blocks of flats or a single detached dwellinghouse, subject to many conditions, limitations and restrictions.  The conditions include submitting a prior approval application. What about the new Use Classes Order – does B1 still exist? The PDR applies to B1(a), B1(b) and B1(c) buildings as defined in the 1987 Use Classes Order (UCO) on 12 March 2020. Furthermore, the UCO amendment Order, which will move B1 uses to new Class E, says that between 1 September 2020 and 31 July 2021 any references to the UCO within the GPDO should be read as if the UCO had not been amended on 1 September. Therefore, for the moment, the changes to the UCO should be disregarded in the context of change of use PDRs What types of building will benefit? The PDR will apply to detached purpose built flats and B1 buildings (or a mixed use combination) built before 1990 with a footprint of no more than 1,000sqm (no overall floorspace limit) that have been vacant for at least six months.  If the building has been rendered unsafe or uninhabitable by the action or inaction of the owner and can be repaired, the building will not benefit from the PDR. The old building must also have been in existence on 12 March 2020. Each building to be proposed to be demolished on a site would need to be considered separately and be the subject of a prior approval application. The PDR does not apply to parts of a building. The Order expressly excludes buildings already converted to residential via certain PDRs, but ‘purpose-built’ is defined – so buildings converted from the use for which they were built, whether with planning permission or not, do not benefit. As one might expect, the old building and its curtilage must not be or form part of a listed building or scheduled monument or land within its curtilage and they must not lie in a conservation area. Flats and B1 buildings in other locations commonly prohibited from permitted development may not be extended via Part 20 Class ZA either, including: areas of outstanding natural beauty, site of special scientific interest, the Broads, National Parks, and World Heritage Sites, a safety hazard area, a military explosives storage area, or land within 3 kilometres of the perimeter of an aerodrome. In addition, no part of the old building or its curtilage can be under an agricultural tenancy, unless the express consent of both the landlord and the tenant has been obtained. A concern raised by the Building Better Building Beautiful Commission was that it will lead to people living in “former offices on business parks miles from public transport”, but there is no limitation on the locations in which the PDR would apply other than those described above. What operational development will be granted prior approval? As one might expect there is a long list of operational development that can be granted prior approval by virtue of this new PDR.  Works considered reasonably necessary for development and construction can be permitted – including works reasonably necessary for the development, including the creation of a cellar even where there was not one before.  In respect of both demolition and construction works relating to the removal or installation of plant, waste, access arrangements, fire safety and services are all referred to. What are the prior approval matters? Prior approval is required; it is not a determination as to whether or not prior approval is required and the following thirteen prior approval matters will be applicable: a) transport and highways impacts of the development; b) contamination risks in relation to the new building; c) flooding risks in relation to the new building; d) the design of the new building; e) the external appearance of the new building; f) the provision of adequate natural light in all habitable rooms of each new dwellinghouse in or comprising the new building; g) the impact of the development on the amenity of the new building and of neighbouring premises, including overlooking, privacy and light; h) impacts of noise from any commercial premises on the intended occupiers of the new dwellinghouses; i) the impact on businesses and new residents of the development’s introduction of, or increase in, residential use in the area in which the development is to take place; j) the impact of the development on heritage and archaeology; k) the method of demolition of the old building; l) the plans for landscaping of the development, including the planting and maintenance of shrubs and trees; and m) i) air traffic and defence asset impacts of the development and ii) whether because of the siting of the building, the development will impact on a protected vista – unless no part of the new building or its plant or masts occupies airspace that the old building did not. The commercial premises referred to in prior approval matter h) includes any commercial or industrial undertaking - including licenced premises or public entertainment venues. All applications must include a written statement of heritage and archaeological considerations. Is the decision maker limited to consideration of the above matters? Yes, although paragraph 14 of the prior approval procedure says: “(14)   The local planning authority may require the developer to submit such information as the authority may reasonably require in order to determine the application, which may include— (a) assessments of impacts or risks; (b) statements setting out how impacts or risks are to be mitigated, having regard to the National Planning Policy Framework issued by the Ministry of Housing, Communities and Local Government in February 2019; or (c) details of proposed building or other operations”. This paragraph may appear to open the door to requests for documents addressing a wide variety of matters or details albeit it will not cause difficulties if both parties have the same idea about what the local planning authority (LPA) may ‘reasonably require’ in order to assess the relevant matters. The LPA may refuse the prior approval application if it considers that the development does not benefit from the PDR or meet its conditions, or insufficient information has been submitted with the application to determine whether or not this is the case. A refusal may however be appealed. When determining an application, the LPA must have regard to the National Planning Policy Framework (2019) (NPPF), where relevant to the subject matter of the prior approval, as if the application were a planning application. There is no requirement to refer to the development plan.  However, the design policies of the NPPF set quite a high bar and will need to be given careful consideration and clearly the NPPF covers a wider range of planning issues that can be brought into play if a LPA thinks relevant. What is the application fee? Draft amendments to the Fee Regulations 2012 propose a fee of £334 per new dwelling where the number of dwellings proposed is less than 50. Where more than 50 dwellings are proposed, the fee will be £16,525 plus £100 for each dwelling above 50 dwellings, up to a maximum fee of £300,000.  For comparison, the fee for a full planning permission for development up of up to 50 homes is £462 per dwelling. How big can the new residential block or dwelling be? Its footprint must sit within the footprint of the old building and be no more than seven metres (excluding plant) or two storeys higher than the old building (whichever is lower), provided the that the new building is no higher than 18 metres.  The internal height of the higher storeys is also controlled. New plant can only project above the roof of the new building to the same height that it projected above the old building, but it does not have to be positioned in the same location. There are no minimum floorspace standards, but the NPPF says “planning decisions should ensure that developments: […] create places that are safe, inclusive and accessible and which promote health and well-being, with a high standard of amenity for existing and future users”. Must the LPA consult with certain other bodies? Yes and for many of the prior approval matters, how to approach consultation and who to consult is set out in the GPDO. With regard to natural light, the GPDO says:  “Where the application relates to prior approval as to natural light, the local planning authority must refuse prior approval if adequate natural light is not provided in all the habitable rooms of the dwellinghouses”. This requirement to consider natural light has now been added to several of the PDRs to change use to residential by the same regulations that will introduce this PDR. See the blog from Lichfields Neighbourly Matters team for more details. Is public consultation required? The proposed upwards extension must be advertised by the LPA by site notice and by serving notice adjoining owners or occupiers.  Reaching all owners and occupiers might be difficult for the LPA, so the applicant should consider providing owners’ contact details where owners are not occupiers. The local planning authority must take into account any representations made to them when determining an application. Does the GPDO specify pre-commencement or other conditions? Yes, including requiring a construction management plan to be submitted prior to commencement. A condition that any new dwellinghouse created under Class ZA is to remain in use as a dwellinghouse will also apply. If the new dwellings are flats they must be self-contained flats and the new dwellings must remain in C3 use, although ancillary uses are permitted. But the LPA can add more planning conditions, provided that they are reasonably related to the subject matter of the prior approval. The GPDO also says the local planning authority may grant prior approval unconditionally, which is presumably the LPA not imposing conditions, rather than permitting the LPA to remove conditions imposed by the GPDO. How long does the prior approval last? The prior approval must be completed within a period of 3 years starting with the date prior approval is granted. As soon as reasonably practicable, the developer must advise the LPA that the development has been completed. Might the proposed development be liable for the Community Infrastructure Levy? Yes, because new floorspace will be created. The development might also benefit from certain CIL exemptions and .  Lichfields can provide bespoke advice regarding this matter. Might the proposed development be liable for s106 contributions? Yes.  Affordable housing contributions are unlikely but cannot be wholly discounted.    At present, Planning Practice Guidance says: “By its nature permitted development should already be generally acceptable in planning terms and therefore planning obligations would ordinarily not be necessary. Any planning obligations entered into should be limited only to matters requiring prior approval and should not, for instance, seek contributions for affordable housing”. This guidance was obviously drafted prior to the current legislation and might be amended to take into account this and other new PDRs, which unlike earlier PDRs create brand new residential floorspace rather than converting exiting floorspace to residential. However, when determining the prior approval application, LPAs will also need to have regard to the National Planning Policy Framework, so far as relevant to the subject matter of the prior approval, as if the application were a planning application. However none of the prior approval matters could be linked to the provision of affordable housing so this should remove this potential obligation The only way of seeking contributions might be if it were reasonably related to one of the matters that the LPA can have regard to (see above) or if raised by a consultee, because Part 20 Class A prior approval applications will need to take into account any representations made to them as a result of any consultation. As ever, any planning obligation should be necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind to the development. [i] DCLG, Thousands more homes to be developed in planning shake up