Mino Themistocli Partner
Planning law in revision
Boris Johnson recently announced that he would introduce the most radical planning changes since the Second World War. The government followed that announcement with the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 (T&CPUA) which creates new use classes in relation to England which comes into effect on 1 September 2020.
In this article I consider what heralded the need for planning change and the form it is taking.
In January 2020 the independent think tank Policy Exchange (PE) published their report on the UK planning process ‘Rethinking the Planning System for the 21st Century’ (PE Report). This report highlighted that since 1947 there has not been any major adjustment of our planning process and that a new approach to planning was urgently required.
Currently we have a system where the use of individual areas of land are controlled by the planners understanding of what is required by the different parts of a local plan. This assessment of ‘need’ takes place every 15 or 20 years and dictates planning policy until a new assessment is undertaken. The following problems arise from such a system:
- If the planning requirements for a locality change, either due to changes in the local economy or its population, this may not be catered for by the local plan. Planning restrictions are tightly imposed;
- Planners face the task of meeting targets which conflict, for example increasing property market activity and at the same time making sure there is adequate provision for social housing;
- The planning process is slow and often expensive; and
- The supply of new housing is slow and has not been able to keep up with demand in commercially successful areas. As a result, supply is below requirement, migration to successful areas is behind demand and local business growth has been stunted through an inability to secure local skills.
Over the last 70 years what would be natural change determined by demand has been prevented by planning dogma. This narrow approach to planning has frustrated developers and the public alike.
The PE Report reflects on some of these issues and proposes a more relaxed approach to the development of areas which gives the government an opportunity, post-COVID-19, to rekindle the present economy by revolutionising the planning process so it can adapt to change and through flexibility continue to meet the needs of a modern society.
PE advocate a simpler organic system where local plans are divided into zones. Each of these zones are classified simply as suitable for development or not. That classification then controls the level of development which could be permitted in the relevant zone. Any proposed development in any zone would then have to meet a set of development control rules to ensure it meets fundamental conditions and requirements. It would also have to be built-in compliance with building regulations. Subject thereto the development would be permitted. Whilst it will depend on how this is put into practice; it is expected that this will be a far quicker planning process.
This new rules-based system simplifies the planning process. As the report provides, ‘as long as a proposed development does not break the development control rules set out in the local plan, meets building regulations and is not in a protected area, it should be permitted.’
The Prime Minister’s announcement reflects the views within the report. It is designed to kick start the construction industry, boost employment and lead the economy out of a possible recession.
The headline changes announced by the PM are as follows:
Property owners will be allowed to convert from a wider group of commercial premises to residential without requiring planning permission for change of permitted use.
Small businesses facing trading difficulties will be able to consider changing the use of their premises. For example, a retail shop could become a café.
Loft conversions would be easier but subject to neighbourhood consultation.
State owned land
State owned land might be considered for better use and released for development.
These changes evolve from the reclassification of the conversion of offices to residential as permitted development which took place in 2014 and have already been widely and successfully applied. However, the opportunities are restricted by a process that requires pre-application approval. That pre-application needs to be accompanied by comprehensive information including the proposed development layout and even the sizing of units. As such what has been allowed as permitted development is swamped by delay and local bureaucracy.
The net effect of the new changes introduced by the T&CPUA is the creation of new use classes E and F. These only consider the permitted use of commercial premises and therefore only address one of the PM’s expressed aims as set out above, item 2. It can therefore be reasonably expected that further planning changes are to follow and that these will look to address the remaining areas identified in the Prime Minister’s speech (particularly as the T&CPUA does not consider residential property).
Category E incorporates A1 (shops); A2 (financial and professional institution); A3 (cafés and restaurants) and B1 (offices) as well as gyms, health centres and nurseries.
This grouped new use E allows for fluidity for buildings within this use category to reflect how business models are changing and expected to further change post-COVID-19.
Category E allows for buildings to have multi uses and different uses, in parts or whole for different times of the day. No planning permission is required for changes of use that remain in category E.
As such, any premise use which falls within category E can change that use within that category as the need arises, whether as a consequence of changes in local demographics and/or changes to the local economy including a further pandemic.
Category F is divided into F1 which incorporates all buildings in wider public use such as schools and libraries and F2 which incorporates buildings where there is group public activity such as swimming pools and skating rinks (but not gyms which as mentioned is within E).
When the full picture of the planning changes are revealed it is expected that the government will have:
Removed the need for many current applications for change of use in the commercial sector;
Cut down identifiable red tape in planning process, including those currently experienced in permitted development of offices to residential;
Sped up planning process when it needs to be applied;
Through grouping together of uses within one planning use class assisted commercial flexibility;
Encouraged enterprise by permitting broader and more flexible commercial opportunity;
Reduced investment risk;
Enhanced capital values; and
Enabled new homes to be rebuilt according to demand.
In terms of commercial lease culture, with the experience of COVID-19 it is expected that a change to a less restrictive planning policy will:
Enable landlords to offer greater flexibility in user provisions in leases.
If future tenants seek force majeure provisions in new leases so as to enable them to bring commercial leases to an end in the event of a future pandemic or other national or worldwide disaster, then landlords might counter the problems tenants anticipate by being able to permit use clauses general in nature and a mix of those uses at any one time. This would add to the marketability of the lease for assignment in the event that the lease cannot otherwise be brought to an end.
Empower existing landlords by providing alternatives in a pandemic
COVID-19 has decimated the retail and office market. Landlords have been placed under pressure to offer tenants rent concessions and future break clauses to avoid properties becoming prematurely vacant. Some landlords have sat tight and with calibre tenants sought to enforce existing lease provisions, though this has been the exception rather than the rule. With a more flexible planning policy landlords being put under pressure to agree concessions in a pandemic could accept the determination of leases and look to a change of planning use to realign their investment with market forces.
At present the stated concerns for such a new planning system are:
The new rules will not give sufficient attention to important planning aims under the present system, such as the need for biodiversity and the target of carbon neutral development. In my view, these concerns are premature and ignore the attention and importance placed on these and many of the present planning constraints, all of which could adequately be represented within the development control rules and building regulations;
Developers will not supply new homes based on demand as they will want to control pricing. The ability to control pricing in this way is a market force which is based on the present planning process. In my view it is arguable that with a simpler planning process developers may find more competition in selling their products which will increase competition for supply; and
The announcements so far do not step into the residential sector and there is concern this area will not be adequately considered.
We will have to wait for further details, but further legislation is awaited, which is expected to further entrench the approach proposed by the PE Report and to follow the lead presented by the T&CPUCA.