Retail PD changes


Author: Miles Crawford


Miles Crawford, Associate, Fladgate LLP (mcrawford@fladgate.com)


 

As part of a drive to support the high street and increase residential supply, the Government has now confirmed that it will bring forward a number of changes to permitted development rights, including options for the increased flexibility of high street planning uses. In particular, the proposed changes are to include:

  • Allowing shops (A1) and professional and financial services offices (A2) to change to (B1) office use and allowing hot food takeaways (A5) to change to either (B1) offices or (C3) residential use.
  • Extending current ‘pop-up’ two years temporary permitted development rights (Class A uses to (B1) offices and vice versa) to three years.

Once made, these changes could present significant opportunities for both owners and occupiers of retail units. Since PD rights limit the planning process and ability for third parties to make representations on the impact of the proposed changes, there would be a significantly enhanced ability to change use where previously it would not have been possible without planning permission. For tenants, there may also be the opportunity to change use without breaching user clauses in their lease or needing to obtain Landlord’s consent. In this context, it is also worth noting that the pre-existing permitted development right to change use form retail (A1) to residential (C3), (which has arguably been overshadowed by the more visible office to residential PD right) is also up by 120% over the past five years since being introduced in 2011.

Whilst it appears that most of the government’s proposals will now come forward later in the year, predictably, they have met firm resistance from local authorities, who instinctively do not like ceding control and oversight in the planning process, not to mention loss of control over design and density as well as loss of affordable housing and planning gain. When the changes do come in, fearing that a town centre could be homogenised to predominantly offices and residential use, some local authorities are likely to seek to impose Article 4 directions to remove such new PD rights. In addition, Landlords who control larger retail portfolios and who want to retain an element of control over their retail offering and tenant mix may seek to restrict their tenants’ ability to change use by limiting the permitted use in the lease and restricting what development they can carry out.

However, when the changes do come in, they certainly will bring with them much greater flexibility and opportunity and could have a significant impact on the retail landscape generally.

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