30 November 2018

Will proposed permitted development rights transform the high street?

In Chancellor Hammond’s Budget on Monday 29 October, the Government pledged £675 million of co-funding: “…to support councils in drawing up formal plans for the transformation of their high streets, to invest in improvements they need and facilitate redevelopment of under-used retail and commercial areas into residential…” with the dual purpose of assisting the housing challenge and delivering footfall to high street businesses.

The Government has since published “Planning reform: Supporting the high street and increasing the delivery of new homes” (the consultation). The consultation period expires on 14 January 2019. This moots the expansion of existing permitted development rights (PD rights) as part of the evolving deregulation of the planning process following legislation implemented in 2013, whereby planning permission is no longer required to change certain uses or carry out certain developments.

What proposed new PD rights does the consultation include?

  • The extension of changes between typical high street uses for existing premises for three years to include more leisure / community uses -  gyms, libraries, health centre to continue enabling business start-ups  and prevent empty premises.
  • Changes from high street uses to office (B1) use and hot food takeaways to residential (C3) use.
  • Upwards extension to a maximum building height of five storeys for certain existing buildings to provide “additional well-designed homes to meet local housing need.”
  • The potential for further storeys on free standing purpose built blocks of flats.
  • Continued use of prior approval for changes to residential use to assess flooding / contamination risks; transport and highways and the impact of additional new homes on existing occupiers and businesses.
  • Permanence of existing time limited PD rights for a change of use for buildings (up to 500sqm) from storage / distribution (B8) to residential (C3) use. Prior approval remains for transport and highways, contamination, air quality, noise and flooding, along with consideration of the impact residential use might have on nearby B8 or light industrial (B1(c)) uses.
  • A new PD right for demolition of commercial buildings and redevelopment as residential, excluding development subject to Environmental Impact Assessment. Views on site configuration; the nature of housing and securing contributions on affordable housing / infrastructure are requested.

What are the impacts of current PD rights to date?
Earlier this year The Royal Institute for Chartered Surveyors (“RICS”) published research (based on five UK city case studies) assessing the impacts of extending PD rights for office to residential conversions in England. The findings omit the impact of changes between non-residential uses on high streets, but are relevant to the consultation proposals which are intended to boost housing.

Key findings include:

  • Far higher rates of prior notification than predicted for office-to residential conversion in all authorities.
  • Divergent views from stakeholders on the merits / impacts of PD rights.
  • The development of extremely poor-quality housing.
  • PD rights create significantly worse residential quality schemes than those requiring planning permission, despite being possible to deliver viable office-to-residential schemes via the more stringent planning permission process. 
  • Direct evidence of the profitability of conversions for developers and land owners, but little contribution to public infrastructure to support additional housing.

 What are the key RICS recommendations to Central Government?

  • PD rights for office-to-residential change of use should be properly reviewed and returned to full planning control.
  • If Government is unwilling to deregulate, it should consider amending the prior approval process to introduce more safeguards. For example:

- a requirement that office space is demonstrated to be vacant before approval can be granted for conversion

- the application of minimum space standards.

  • Reasonable fee levels for Local Planning Authorities (LPAs) in processing prior notification and to levy planning gain (including affordable housing contributions).
  • Amendment of the CIL regulations so that new residential units are liable for a contribution towards local infrastructure need regardless of previous use or building vacancy.

Are PD rights universal?
No - LPAs can use Article 4 of the Town and Country Planning (General Permitted Development) (England) Order 2015 to exclude PD rights for a specified area or site and require planning permission. Legislative expansion of PD rights may result in more frequent LPA use of Article 4 rights to preclude those potential negative impacts of development highlighted by RICS, which is a more time consuming, piecemeal process than the original requirement to obtain planning permission.

PD rights are also exempt for buildings in Conservation Areas, Areas of Outstanding National Beauty, the Broads, National Parks, World Heritage Sites or in Sites of Special Scientific Interest (SSSI) and listed buildings, scheduled monuments and land exempt for safety reasons.

Successful delivery?
The majority of the RICS recommendations have been overlooked by Ministers in the consultation and additional housing delivery remains a key driver for ongoing deregulation.

The consultation proposal for replacement of demolished commercial buildings by residential development without planning permission is acknowledged to be “more ambitious” than existing PD rights. It invites comments on mitigation of impacts via prior approval and securing developer funding for affordable housing and infrastructure. This enables stakeholders to endorse the RICS safeguards and call for comprehensive funding for supporting infrastructure.

However, given LPAs ability to exclude PD rights, and the necessity for a comprehensive prior approvals system to mitigate the impact of development, it is questionable whether legislative implementation of the consultation proposals can provide the high street boost the Government intends, particularly in creating suitable quality housing in the right places with the relevant supporting infrastructure.