A guide to Permitted Development Rights
Understanding Permitted Development Rights for Repurposing Commercial Properties
Introduction:
In September 2020, significant changes were introduced regarding permitted development rights, specifically for repurposing commercial properties into residential use. These changes brought about a new use class, Class E, which encompasses various types of establishments such as retail, office spaces, restaurants, cafes, and parts of the D1 category. The updated regulations allow for the conversion of these properties to residential without the need for planning permission, although modifications to the building’s exterior might still require approval. However, it is essential to be aware of certain constraints and considerations before undertaking such projects.
Meeting Size and Usage Requirements:
According to the newly introduced regulations, the floor space intended for conversion must have been used for commercial business or service purposes for a minimum of two years before the application. Additionally, the floor space must have been vacant for at least three months preceding the application. These requirements aim to prevent any potential abuse of the planning system. Landlords, however, may strategically keep units vacant for three months or serve break notices to create the necessary vacancy and endure temporary rent losses to engage the new permitted development rights.
Factors Impacting the Conversion Process:
While planning permission may not be necessary for the change of use, there are other considerations within the prior approval process. These factors are similar to those encountered in other permitted development rights for residential conversions. They include assessing the transportation impact of the development, evaluating contamination risks associated with the building, analyzing flood risks pertaining to the property, examining the impact of noise from commercial premises on future occupants, and ensuring adequate provision of natural light in all habitable rooms.
Flood Risk Assessments and Challenges:
Among these considerations, flood risk assessments have emerged as a particular concern for developers. Several developers have completed their projects according to the regulations, only to find themselves waiting for lengthy flood risk assessments before they can proceed. The exact workings and causes of these delays are often unclear, but they can lead to unforeseen setbacks. Therefore, it is crucial to investigate and understand the local flood risk assessment processes in the area where the property is located, as it can significantly impact project timelines and financial outcomes.
Localized Considerations and Due Diligence:
It is important to recognize that the application of these regulations is not universal but rather localized, governed by local bylaws. To navigate through the complexities of repurposing properties, it is advisable to research and connect with other developers and property owners in the vicinity. By engaging with local stakeholders, one can gain insights into the specific circumstances and challenges related to contamination risks, flood risk assessments, and other crucial factors. Conducting thorough due diligence beforehand can help mitigate potential risks and ensure a smoother transition throughout the project.
The Implications of Minimum EPC Ratings:
In addition to the permitted development rights for repurposing commercial properties, it is essential to consider the implications of minimum Energy Performance Certificate (EPC) ratings. These ratings were introduced on a specific date, resulting in numerous offices in London becoming ineligible for rental. The minimum rating requirements are set to rise further in 2027 and 2030, potentially rendering over 90 percent of retail premises illegal to rent out. However, the reluctance of landlords to invest in costly EPC improvements persists, given the uncertainty of future legislation changes.
Conclusion:
The recent changes in permitted development rights offer potential opportunities for repurposing commercial properties into residential spaces. However, it is crucial to approach such projects with caution and thorough understanding of the regulations and localized considerations. Careful due diligence, including assessing flood risk assessments and other factors, can help prevent catastrophic delays and financial losses. Additionally, staying informed about EPC rating requirements and the ever-changing legislative landscape is vital for making informed decisions in property development.
Remember, before embarking on any property development venture, always seek professional advice and consult with relevant experts to ensure compliance and success.