The controversial changes to the planning system which extend permitted development rights came into force on 30 May 2013. These changes were initially announced by the government at the beginning of this year as the latest in a series of measures to reform the planning system and stimulate economic growth.

The most eye-catching of these changes is the right to convert office buildings to residential use without planning permission. Eric Pickles, Secretary of State for Communities and Local Government, has described this as a “common sense measure [to] help the regeneration of our towns and cities”. The change is motivated by the need to promote economic growth as well as easing the national housing crisis and bringing the surplus stock of empty office buildings back into productive use. In these respects the new rights are to be welcomed, however a number of issues arise in their application.

First, in many cases it will not be possible to implement a change of use without undertaking some operational development, for which planning permission will still be required. So if, for example, external works or reconfiguration of access arrangements are required to facilitate the change of use, this will still need a planning application. This will potentially act as a significant constraint on the new right.

Second, one of the key concerns is that the right may be used for low quality accommodation and unsuitable locations which lack the infrastructure and facilities to support residential use. Furthermore the high residential rents and sale prices are likely to be tempting and it will be difficult to ensure that only truly surplus office space is released. This could also have adverse effects and lead to a reduction in affordable employment space, which could prejudice many small businesses and start-ups.

Third, the new right to convert office to residential will not apply to buildings which have never actually been used as offices. In order to qualify, the building must have been used as an office immediately before 30 May 2013 or (if vacant) must have last been used as an office. So if an office building has been built and marketed as such but has never actually been occupied as an office then it could not qualify for the new right. The government has confirmed this was intentional as it wants to “avoid developers building offices with the sole intention of sidestepping the requirement for residential planning permission”.

Finally, one other controversial aspect of the legislation is that local authorities will lose out on affordable housing contributions as such residential conversions will be outside the scope of section 106 agreements. These schemes will be caught by the Community Infrastructure Levy, however CIL liability will not be triggered where the vacant floorspace condition can be met (i.e. where the building has been in use for six of the last twelve months). The government has recently consulted on proposals to adjust this vacancy test.

Local planning authorities were given the option of applying for an exemption for particular areas if they could demonstrate that the extended permitted development rights will lead to either “the loss of a nationally significant area of economic activity” or “substantial adverse economic consequences at local level”. Despite a very high volume of applications, Eric Pickles announced on 9 May 2013 that just 17 LPAs have been granted exemptions for specific parts of their areas, 11 of which are in London.

Many LPAs will be surprised that so few exemptions were granted. LPAs across London and south-east England are reportedly considering legal challenges to the permitted development rights and the refusals to grant more exemptions. Other LPAs are supposedly considering issuing “Article 4 directions” for their area, which are regulations removing permitted development rights such that planning applications would still need to be submitted. Such Article 4 directions would need to be approved by the Secretary of State.

The right to convert office to residential will not be automatic and in certain cases is subject to a simplified development consent process known as prior approval. For certain conversions, developers will be expected to apply to the LPA to determine whether prior approval in relation to flooding, highways and contamination matters is required. This process could be seen as a lengthy administrative hurdle in its own right.

Any change of use which cannot satisfy the prior approval requirements will still need a planning application. We expect that LPAs will be looking very carefully at the prior approval process as a means of exerting control and to resist changes of use which they do not support. The right to change use to residential will be prohibited until the LPA either grants prior approval or confirms it is not required. If the LPA fails to make any decision within 56 days of receipt of an application then the change of use can go ahead.

The legislation also introduces other new permitted development rights which include the following:

  • Temporary changes of use are to be allowed for buildings moving from A1 (shops), A2 (financial and professional services), A3 (restaurants), A4 (pubs), A5 (takeaways), B1 (business), D1 (non-residential institutions) and D2 (leisure) to uses within A1, A2, A3 and B1. Operation under the new use for a period of up to two years will be allowed without planning permission. However, those tempted by this new change should consider the implications of planning permission for a permanent change being refused after the two year grace period.
  • Agricultural buildings smaller than 500 m2 may be converted to uses within classes A1, A2, A3, B1, B8 (storage or distribution), C1 (hotels) and D2. In the case of buildings with a footprint of more than 150 m2 a prior approval procedure will apply.
  • For changes of use between B1 or B2 to B8 and vice-versa, the threshold below which no planning permission is required is to be raised from 235 m2 to 500m2.
  • New permitted development rights will allow increased limits for business and residential extensions. The respective size limits and percentage increases are to be doubled for a period of three years.

The extended permitted development rights have been designed to grab headlines and boost the economy. In reality they are unlikely to have much impact on large development. They will not obviate the need for building regulations approvals and they may be open to abuse by less scrupulous developers. Time will tell whether they will be consigned to the annals of planning history as yet another damp squib.