Building onwards and upwards – what do investors need to know?

30 September 2020 | Investment

With changes to the use class system and permitted development rights now in force, Christina Daniels and Marisia Beard of leading law firm BDB Pitman outline what this means for landlords and property investors going forward.

As of the August 1, planning applications are no longer required to add up to two additional storeys to homes, commercial and mixed-use buildings; demolish and rebuild unused buildings as homes, and repurpose commercial and retail properties.

Building upwards

The construction of up to two additional storeys is now permitted where the existing house is two or more storeys, or one additional storey where the existing dwellinghouse consists of only one storey. The changes also enable the construction of up to two additional storeys of dwellinghouse immediately above a building within Class A1 (shops), A2 (financial and professional services), A3 (restaurants and cafes); B1(a) (offices), betting office, payday loan shop or launderette; or mixed-use buildings combining two or more uses above or C3 (dwellinghouses) and one of the uses above. For terraces, where the existing building consists of one storey, only one additional storey is permitted.

The permitted development rights (PDR) include engineering operations, such as strengthening existing walls and foundations or installing services. as is reasonably necessary to construct the additional storeys, provide safe access and egress, and storage, waste or other ancillary facilities reasonably necessary to support the new dwellinghouses.

Building onwards and upwards - what do investors need to know?

The new rights do not apply to dwellinghouses converted to residential using PDR, those constructed before 1 July 1948 or after 28 October 2018 or where the existing house has already been enlarged by the addition of one or more storeys – whether under permitted development or otherwise.

Likewise, they do not apply to commercial/mixed-use buildings less than three storeys in height above ground level, constructed before 1 July 1948 or after 5 March 2018, in a use or mixed-use other than those listed above, or a use falling within Class C3 on 5 March 2018.

Other restrictions include the introduction of maximum roof heights relating to additional storeys on dwellinghouses and the internal floor to ceiling height of additional storeys which cannot be more than the lower of 3m and the existing height of any storeys in the main part of the existing house/building. The new storeys must only be constructed on the main part of the building, excluding any extensions which are lower. There cannot be any visible support structures on or attached to the exterior – and materials used in exterior works must be of similar appearance to the existing building. Any new dwellinghouses built above commercial uses must also be flats.

Despite the changes, there are situations in which the developer must still apply to the local planning authority (LPA) for prior approval.

This might include where there are predicted impacts upon transport and highways, air traffic and defence assets, and the ability to construct safe access and egress, and storage, waste or other ancillary facilities. Consideration must also be given to the impact on the amenity of the existing buildings and neighbouring properties – as well as adjustments to the external appearance of the building. Developers are also responsible for considering the impact of noise from the commercial premises on the new dwellinghouses. Risks, such as those of contamination and flooding, must be assessed.

Demolishing vacant buildings

Planning permission is no longer required to demolish and rebuild vacant residential and commercial buildings if they are rebuilt as homes. This applies to vacant buildings that fell within use class B1 or free-standing purpose-built residential blocks of flats (C3) on 12 March 2020. The demolished building can be replaced by either a single detached dwellinghouse or a purpose-built block of flats.

The building must have been built before 1 January 1990, have a footprint of 1,000sqm or less and been vacant for at least 6 months prior to applying for prior approval. The redevelopment must be a single new building within the footprint of the existing building, with a maximum footprint of 1,000sqm and maximum height of 18m. Note that this does not apply to listed buildings or scheduled monuments, or land within their curtilage.

Furthermore, land cannot be occupied under an agricultural tenancy, unless express consent is given from the landlord and tenant. This also does not apply to the demolition of part of a building or allow the demolition of more than one building within the curtilage and the incorporation of any additional footprint.

Prior approval is also needed in respect to the transport and highway impacts, contamination and flood risk, impact of noise from other premises on the future residents. design and external appearance of the building, adequacy of natural light in all habitable rooms, impact of introducing residential use into an area and the impact on the amenity of the new building and of neighbouring premises.

The developer must also provide drawings showing dimensions of the old and new buildings, detailed floor plans, a construction management plan and a heritage and archaeology statement.

Building onwards and upwards - what do investors need to know?

Repurposing High Streets

Changes have been introduced to the Use Classes Order to allow for a mix of retail, business and leisure uses to reflect the changing landscape of the high street whilst protecting community assets.

This includes the introduction of Class E – a new town centre use enabling buildings to change use from uses previously falling within Classes A1, A2, A3, B1, D1 and D2, or a mix of these uses, without applying for planning permission.  These changes also apply to office and retail parks. Classes F1 and F2 group community assets such as schools, libraries, swimming pools and local shops. Interestingly, pubs, wine bars, takeaways, cinemas, bingo halls and concert and dance halls are now included as sui generis, meaning that planning permission is required to secure a change of use.

A1, A2, A3 and B1 assets automatically fall within Class E from 1 September 2020, which will give developers much more flexibility. However, buildings will need to be brought into a use permitted under an existing permission (if not being used or occupied as such) before changing to another Class E use. Planning applications submitted prior to 1 September 2020, will be determined in accordance with the use classes in effect at the time of submission. It is also important to remember that there may be restrictions on the use which limit the application of Class E contained in leases or planning conditions and that changes to permitted development rights will not follow until 31 July 2021.

The changes remove some of the formalities surrounding planning applications, providing developers with welcome flexibility to redevelop otherwise unused properties, provide much-needed housing and utilise sites more effectively. On the other hand, those with newly sui generis uses will have less flexibility and be subject to LPA control. Landlords and investors will need to be alive to these changes when looking at leases and planning conditions to see the extent to which a use is authorised. 

It is important to check local designations and that LPAs have not restricted the use of the new PDR through Article 4 Directions. However, the changes to the Use Class Order currently hinge on the outcome of a judicial review, with a challenge expected to be heard in mid-October. 

*Christina Daniels, planning partner and Marisia Beard, associate at BDB Pitman

This post has originally been featured in Property Investor Today.