Business experts

Expert advice: Why has the Government changed the commercial property ‘use class’ system in England?

Written by Jonathan Watts on .

Jonathan Watts

 

What are the new use classifications for business premises, and how do they affect property owners, landlords and tenants? Jonathan Watts of FSM Solicitors explains.

On September 1, 2020 the Government implemented significant changes to the 'use classes' system in England, introducing new Town and Country Planning (Use Classes) Regulations which amend – rather than replace – the main 1987 regulations.

The main aim of this change is to allow businesses greater flexibility in their use of commercial premises and to enable buildings on high streets and in town centres to be easily repurposed without the need for planning permission.

The traditional high street has struggled in recent years, and the Covid-19 pandemic has exacerbated the situation. These changes allow businesses more freedom to diversify or switch to more profitable business models.

What are the changes?

The Regulations introduced three new use classes:

  • Use Class E – Commercial business and service
  • Use Class F1 – Learning and non-residential
  • Use Class F2 – Local community

The key thing to note is that planning permission is not required for change of use within the same use class.

The most notable change is the introduction of Use Class E, as a wide variety of uses are now included in this class. It also includes a new concept of 'part use', allowing an occupier to change use of part of a property to another use within Class E, such as adding a café to a shop, without planning permission.

Businesses which now fall under Use Class E include:

  • Retail (formerly class A1)
  • Restaurants (formerly class A3)
  • Financial, professional or commercial services (formerly class A2)
  • Indoor sport, recreation or fitness (formerly class D2)
  • Publicly available medical or health services (formerly class D1)
  • Crèches and nurseries (formerly class D1)
  • Offices (formerly class B1)
  • Research and development (formerly class B1)
  • Industrial processes (which can be carried out without disturbance to neighbours) (formerly class B1)

Use Class F

The new Use Class F1 (learning and non-residential institutions) includes education, art displays, museums, libraries, public halls, places of worship and law courts.

The new Use Class F2 (Local community class) combines local shops (under 280 square metres and located at least 1km from any commercial retail), community halls, outdoor leisure or sport venues, skating rinks and swimming pools.

Sui Generis

Several uses have not been incorporated into the new use classes and instead termed 'sui generis' – Latin for 'in a class by itself'. Sui generis uses cannot be changed without planning permission. Examples include theatres, casinos, drinking establishments, hot food takeaways, cinemas, concert halls and scrapyards. The regulations have expanded this list significantly.

How does this affect tenants and landlords?

Although these changes will be welcomed by most tenants, there are a few things to remember. Check your lease before presuming you are able to change the use of your premises. Although planning permission may not be required for a change of use, your landlord’s consent might be. In addition, planning permission will still be required for any building work required to change the use of the premises.

Some businesses will find the new regulations are more restrictive than previously (such as a hot food takeaway or a pub). By way of example, introducing a restaurant into a pub now requires planning permission.

For landlords, these changes may be concerning. Existing leases could suddenly now permit a much wider range of uses than originally envisaged. It is worth seeking legal advice to ensure your future leases are drawn up in such a way to allow only uses with which you are comfortable.

Jonathan Watts is the commercial property expert at FSM Solicitors https://fsmsolicitors.co.uk