Class act
The Department for Communities and Local Government has unveiled proposals to make it easier to change buildings from commercial use to residential. Caroline Bywater assesses the impact on local authorities.
Nobody can deny that there is a need for more housing in this country, nor that there is a high level of vacancy of commercial units in many parts of the country, so it should perhaps not have come as a surprise that the government recently consulted on plans to ease restrictions on changes of use from commercial to residential. If those plans go through, what do they mean for local authorities?
The current proposal is to allow, by way of a new permitted development right, changes of use from B1 to C3. This includes office, R&D and light industrial units. It is these units which are, in theory at least, acceptable in existing residential areas. You can see therefore that there is a strong argument that converting these units to residential would make sense, but a mixed, if not negative, response has been received. Many of the issues will be heightened should the proposal be extended to include B2 and B8 uses: whilst that is not CLG’s key aim at the moment, it formed part of the consultation so is very much in contemplation.
From an amenity point of view, whilst there is a certain analogy between areas where B1 and residential uses can be carried out, they form part of different use classes for a reason and there are numerous variations in amenity demands and impacts between them. Industrial land is often not located in areas that have good access to shops, open space and other services; commercial uses can be acceptable on land where there is a higher risk (or even evidence) of flooding than would be acceptable for a residential use; and without being able to demand a s106 agreement, local authorities cannot be assured that the necessary medical services, schools etc will be voluntarily forthcoming. Perhaps some of this can be dealt with by introducing a threshold over which the permitted development would not apply, although it may prove difficult to reach agreement on what that threshold should be.
The proposed permitted development right would mean that local authorities could no longer insist on the provision of a percentage of affordable housing, or that specific design criteria are met. Experience tells that the market alone will not ensure that the residential units formed are of the quality or standard that would normally be required.
Whilst the provision of more residential units is to be welcomed in itself, how does this current proposal tie in with the well-rehearsed need to promote economic growth? A number of local authorities are of the view that this proposal would run counter to their local policies of developing business clusters or encouraging and protecting small business units.
These proposed permitted development rights would extend only to a change of use, not to any operational development. In reality, are there many B1 units that are suitable for C3 use without some form of operational development? Possibly not, but planning authorities may find it hard to refuse applications for related operational development if it is shown that the unit is vacant and that there is a market for it to be used for much-needed housing.
CLG proposes a permitted change back from C3 to B1 within a five year period of the initial change. However, once a property had changed to a C3 use, would it not benefit from the usual permitted development rights attaching to a dwellinghouse? That may make it much less attractive for conversion back to business use.
The consultation paper refers to the use of article 4 directions to restrict the ability to change from B1 to C3. It seems likely that many authorities would be tempted to use these liberally in order not to compromise their local policies, but the extra work that this will entail, not to mention the risk of compensation becoming due, will no doubt be a significant deterrent. In fact, this does not sit well with the draft National Planning Policy Framework, which seeks to limit the use of article 4 directions in any case.
On top of all of the above, with the potential loss of application fees, and of business rates, there seems little in these proposals to warm local authorities to them. CLG estimates, however, that they could deliver 70,000 new homes over 10 years, so they may be worth some careful consideration.
The above consultation was followed very swiftly by an announcement by Greg Clark encouraging temporary uses of vacant buildings and in the background of an expected review of use class issues generally. It is unlikely that this issue will be quietly forgotten.
Caroline Bywater is a Senior Solicitor at Mills & Reeve LLP. She can be contacted on 01223 222365 or by email at This email address is being protected from spambots. You need JavaScript enabled to view it..
