Why are commercial landlords considering converting office space?
All properties in the United Kingdom, both commercial and residential fall into various ‘use classes’. After the onset of the global Covid-19 pandemic, these use classes were amended in September 2020. The main reason for the changes by the UK government was to afford businesses the flexibility to adapt to changes in the retail environment.
How have working practices affected office usage?
Hybrid working or working from home policies have now become a permanent feature with a majority of businesses in the UK, and consequently, the necessity and demand for office space have been reduced. This has led to a surplus of vacant office space, resulting in landlords facing pressure to explore other ways to ensure their commercial premises are profitably utilised. In order to address these issues, landlords may need to consider a change of the designated use class assigned to their property.
How do you find out what your building is authorised for?
You may or may not be aware of the actual authorised use of your building. Unfortunately, no readily accessible central register exists that stores such details, and some investigation of planning history may be required to ascertain this information. Whilst a commercial lease may state the permitted use for the leased property, this does not operate as authorisation of such use under planning law. A variety of sources need to be considered, including title deeds, enquiries made with the planning department of the local authority (which may have such records), as well as the historic use of the property.
How do I change the use of my office space?
Normally, if you wish to change the use from one use class to another, you will need to apply for planning permission. However, there are some exceptions, and generally, changes within the same use class do not require planning permission. For example, a change of use from a café (Class E(b)) to an office (Class E(g)) does not require planning permission. However, be aware that if any building work is required to facilitate a change, planning permission may still be necessary. Specific legal and planning-based advice should always be obtained before taking any steps to change an existing use.
What is Use Class E?
Use Class E, introduced in September 2020, covers a wide array of uses including the following:
|
Use Class |
Use |
|
E(a) |
Display or retail sale of goods, other than hot food |
|
E(b) |
Sale of food and drink for consumption (mostly) on the premises |
|
E(c) |
This is split into 3 sub-classes: · Financial services – E(c)(i) · Professional services (other than health or medical services) – E(c)(ii) · Other appropriate services in a commercial, business, or service locality – E(c)(iii) |
|
E(d) |
Indoor sport, recreation, or fitness (not involving motorised vehicles or firearms or use as a swimming pool or skating rink.) |
|
E(e) |
Provision of medical or health services (except the use of premises attached to the residence of the consultant or practitioner) |
|
E(f) |
Creche, day nursery, or day centre (not including a residential use) |
|
E(g) |
Uses which can be carried out in a residential area without detriment to its amenity: Offices to carry out any operational or administrative functions – E(g)(i) Research and development of products or processes – E(g)(ii) Industrial processes – E(g)(iii) |
You can see the various categories under the Town and Country Planning Use Class Order 1987 (as amended) on the Planning Portal website.
Permitted Development rights also exist, which enable changes from one use class to another without the need for a formal planning application based on the more speedy ‘prior approval’ process.
Can I change an office to residential use?
Change of use from office use to residential use is governed under the General Permitted Development Order and the new “Class MA” which took effect on 1st August 2021. This process requires a more streamlined prior approval application. Use Class MA does not just relate to offices but also other uses within Class E (see table above).
The following conditions for change of use to residential use under Class MA apply:
- The use must be residential. Houses in Multiple Occupation (HMOs) do not qualify.
- The property must be vacant for at least 3 months prior to an application for prior approval. You cannot make an application if tenants are occupying the property.
- The office use must have been in operation for at least 2 years.
- Article 4 restrictions (dis-applying permitted development rights) may apply, preventing the change of use.
- Listed Buildings are not eligible for a change of use under Class MA.
How 3CS can help
If you have a freehold office building that is empty and you are having trouble re-letting it, you may wish to consider the permitted rights offered under the above legislation as a means of engineering the planning, and potentially enhancing the marketability of the building to residential developers (or end users where current options have been exhausted.)
Commercial leases will specify the permitted use of the leased property, and if you are a landlord or tenant of an existing lease, and you wish to change the use under the lease, you will need to enter into a Deed of Variation to the existing lease, to be signed by all parties. This will need to be done in addition to any planning application that may be required.
We regularly act on behalf of landlords and tenants who wish to vary the terms of the lease including amending the change of use. We can also guide you in identifying the authorised use of your property and in investigating the need for any planning applications that may be required.
For further information on changing the designated use of an office or any commercial property legal matter, please get in touch with your usual 3CS contact.
