Significant changes announced to planning classes
Significant changes to the Use Classes Order for commercial property in England have been announced by the Government. The announcement will allow businesses and landlords much greater flexibility to adapt and diversify to meet changing needs and this is likely to shape the future of the high street.
From 1 September 2020, use classes A1 (shops), A2 (financial and professional services), A3 (restaurants and cafes), B1 (offices and light industrial), D1 and D2 (institutions and leisure) will all be replaced with class E, which covers commercial, business and service.
This new class E allows more flexibility in that changes between different uses within the same class will no longer require planning permission. There will be the potential from September for more mixed uses within buildings, so a building could be a retail unit by day and offer a restaurant service at night.
There are some exclusions from class E including drinking establishments (previously A4) and hot food take-aways (previously A5) which will both fall within new sui generis uses requiring planning permission. This is to allow local residents’ views to be taken into account. The Government is also keen to protect the special role that pubs have in many communities.
Other new classes include a learning and non-residential institutions use class F1 replacing former use class D1 regarding schools, libraries and galleries. There is also to be a local community class F2, grouping properties from former use class D2 for example swimming pools, ice skating rinks and other areas for outdoor sports as well as buildings used by local communities.
The classes which remain unchanged are Class C (residential), Class B2 (general industrial) and Class B8 (storage and distribution).
These changes will provide more flexibility for landlords, developers and tenants to revitalise specific properties and their uses. A longer-term benefit for landlords is that rents might rise as buildings become more attractive and profitable, but it will also make rent reviews more complicated given the property could in the future have multiple uses. As many businesses are just starting to resume trade following the lockdown, they certainly will not want to see rent rises in the immediate future.
These changes will be welcomed by many in the industry, but successful town centres tend to be successful because they offer a number of mixed businesses and services, whereas from September more profitable uses might be more attractive which could restrict the diversity of the high street. It remains to be seen.