On 1 August 2021, the government bestowed a great gift on property developers – it was the first day for a new permitted development right to convert commercial premises into flats. Many developers have built whole businesses around commercial-to-resi conversions. So what is the new Class MA right and what opportunities does it present for the canny developer? More importantly, perhaps, what pitfalls lie in wait for the unwary?
What are Permitted Development Rights?
First, a quick reminder. Permitted development (PD) rights allow you to carry out some forms of development without needing full planning permission. The intention is that PD rights free up the planning system by removing straightforward, small-scale applications from the planning system altogether, thereby liberating planners and applicants, encouraging certain limited types of development, and reducing red tape. The new Class MA is intended to make it easier for developers to convert commercial buildings in order to boost housing supply.
What is a Change of Use?
Converting commercial premises into residential is a change of use. The Town & Country Planning Act 1990 says that a change of use is a form of development, and planning permission is required for development. Class MA allows that a specific change of use is a form of development that is already permitted, i.e. a full planning application is not required.
The specific change of use that is allowed under Class MA is from Use Class E (Commercial, business & service) to Use Class C3 (Residential). Use Class E itself is a new kid on the block – it was created in 2020 through a merger of a host of other use classes (A1, A2, A3, B1 etc). I wrote about Use Class E in this previous article. In summary, the following uses fall under E:
- retail shops (formerly Use Class A1)
- cafes and restaurants (formerly A3)
- financial and professional services (formerly A2)
- indoor sport and fitness (formerly within D2(e))
- medical or health services (formerly D1(a))
- a crèche, day nursery or day centre (formerly D1(b))
- an office (formerly B1(a))
- research and development (formerly B1(b))
- light industry (formerly B1(c))
The creation of Use Class E is really an effort to support the High Street, which has been in decline for years under an onslaught from online retailing and punishing business rates. Combining lots of uses into one new use, meaning planning permission is not required to change between them, should help landlords and prospective tenants be more creative in finding new uses for vacant premises. The old use class system was designed to protect traditional retailers and dates from a time when shopping was done in person and in town centres. The government’s vision for the High Street is that there will be a much greater mix of retail, leisure and business activity – trying to restrict what people can do in shops is counterproductive.
As well as commercial uses, though, the government wants to see more people living in our town centres, which is where the new Class MA rights come in. They allow the new Use Class E premises to be converted into residential dwellings. This helps make better use of vacant premises but also helps solve the housing supply crisis.
It is confusing that when we are talking about uses and about permitted development rights we use the word ‘Class’, followed by a letter. However, they are different things. Use Class E is a use class set out in the Use Classes Order (UCE), Class MA is a permitted development right set out in the General Permitted Development Order (GPDO). Don’t get them mixed up!
The key restrictions for Class MA conversions
Class MA permitted development rights come with strings attached. The rules you must follow as set out in the General Permitted Development Order (the GPDO), but the main things to remember are:
- Class MA allows the conversion of premises in Use Class E (commercial, business and services) to C3 (residential)
- You must apply for prior approval (a kind of application to the council) before starting work
- The building must have been vacant for or a continuous period of at least 3 months immediately prior to the date of the application for prior approval
- The building must have been in Use Class E use for a continuous period of at least 2 years prior to the date of the application for prior approval
- The cumulative floorspace of the building to be converted cannot exceed 1,500 square metres (by cumulative, it means including all previous applications under Use Class MA – so if you apply first to convert the ground floor, and later the first floor, the total area converted must not exceed 1,500 square metres).
- The building (or land on which it sits) cannot form part of a site of special scientific interest, a listed building or its curtilage, a scheduled monument or its curtilage, a safety hazard area, a military explosives area
- The building cannot be within an area of outstanding natural beauty (AONB), an area specified by the Secretary of State for the purposes of section 41(3) of the Wildlife and Countryside Act 1981, the Broads, a National Park or a World Heritage Site
When you apply for prior approval, the local planning authority has the power to assess the following issues:
- Transport and parking
- Noise from nearby commercial premises
- where the site is located in a Conservation Area, the impact on the character and sustainability of the Conservation Area
- the provision of adequate natural light in all habitable rooms of the dwellinghouses
- … and a few other less common requirements that I will omit for now to avoid complicating this article too much!
All of the various conditions, limitations and restrictions are outside the scope of this article. The best source is the GPDO (the actual legislation itself), available at this link, but I would also recommend getting professional advice from a chartered planning consultant. I offer quick and easy advice through my Ask Martin service.
How do I assess whether a property is suitable for conversion under Class MA?
Step One: The first thing you need to establish is whether your premises are currently in Use Class E. Don’t make a casual assumption that your use is Use Class E – some town centres that you would imagine to be Class E are not: betting shops, restaurants and hot food takeaways are sui generis (outside of the classes), for example. Planning consultants like me spend a lot of time arguing with councils over whether a particular use is contained within a particular use class. I recently helped a client apply to convert a shop in Hull into a flat. The shop was part dry cleaners, part laundrette and offered an ironing service. The council tried to argue that this was a sui generis use (a use on its own and therefore not eligible for conversion). We have made the case the primary use was as a dry cleaners (formerly Use Class A1, and now Use Class E), and await the decision.
Step Two: Having established that your premises are in Use Class E, they must have been vacant for a continuous period of three months before you submit your application. This is presumably to stop landlord kicking out tenants and thereby closing viable businesses simply in order to profit from the new Class MA conversion rights, though it is difficult to see that this short 3 month delay would be much of a deterrent.
Step Three: You must confirm that the premises have been in a continuous Use Class E for a two year period leading up to the date of your application.
Step Four: You must check whether your premises are situated in a restricted area: a site of special scientific interest, a listed building or its curtilage, a scheduled monument or its curtilage, a safety hazard area, a military explosives area, an area of outstanding natural beauty (AONB), an area specified by the Secretary of State for the purposes of section 41(3) of the Wildlife and Countryside Act 1981, the Broads, a National Park or a World Heritage Site.
Step Five: you must consider whether the council might refuse to grant you prior approval on the grounds of transport, contamination, flooding, noise from other commercial premises, access to natural light, location in a conservation area.
On all of this, it is best to get professional advice from a chartered town planner. Perhaps make an enquiry of the lovely planners at Just Planning?
Or get some advice directly from our CEO Martin Gaine, available at martingaine.com/ask-martin.