Use class E became a reality on 1 September 2020, bringing together “commercial, business and service” uses into one broad category.
This change was made to provide greater flexibility, allowing changes of use between a wide range of commercial uses without the need for planning permission. It was hoped this would invigorate the ailing high street by enabling businesses to respond more nimbly to changing market demands.
This in turn led to reconsideration of permitted development rights, and the government has proposed various changes, including new rights allowing a change of use through prior approval from the new class E to class C3 (residential) where certain requirements are met. Allowing a change to residential use without planning permission will, it is hoped, increase the number of local residents in town and city centres, driving up footfall and reinvigorating the high street.
But have these aims been realised and at what cost?
The pandemic effect
Even before the pandemic, the government was exploring ways to “fix” the high street, and the economic effects of Covid-19, particularly on the retail sector, have accelerated this. However, the enduring nature of the pandemic has also made it difficult to truly ascertain the impact of the introduction of class E. Indeed, as Covid-19 restrictions have been in force during the entire time that class E has been in existence, property owners have not been bringing buildings into any use – let alone new uses – in a way we might normally expect. We have, however, seen some of the effects of class E on development consents.
Constraints on development
Local authorities tend to like control. One implication of the new class E seems to be an increase in the use of conditions in planning permissions to control use. For example, where permission might previously have been granted for class A2, it is now often being granted for class E with a condition limiting use to financial services. In practice such conditions mean that the introduction of class E is actually resulting in less flexibility for many new developments.
This is particularly true in larger, multi-use schemes where certain assumptions need to be made to enable assessments to be carried out. For example, where an environmental assessment is to be carried out, in order to avoid the need to assess the impacts of all possible permutations of use, parameters are imposed as to what will be allowed. This often narrows the long-term range of possible uses for a development compared to those otherwise allowed by class E.
The policy conundrum
Issues also arise as most planning policy still reflects the previous Use Classes Order. For example, even the newly adopted London Plan 2021 sets out the minimum cycle parking standards by reference to A1 and B1 uses, instead of using a blended approach for all of class E. Developers are unlikely to want to have to provide for the “worst-case scenario” in these situations and, as such, are likely instead to commit to a particular balance of use within class E, be that office or retail, to ensure they align with the necessary requirements. Once again this actually limits the intended flexibility. And what of policies promoting, for example, employment uses in a specific area? Should developers expect their class E consents to be restricted? At the moment, practice seems to vary, creating unpredictability, which is not a developer’s best friend.
Conditions confusion
Another area of uncertainty causing a headache is trying to predict the approach among local authorities when interpreting conditions under existing planning permissions restricting uses by reference to the old Use Classes Order. While many property owners are interpreting conditions limiting them to, for example, A1 use as now allowing anything within class E, many authorities do not accept that this wider range of uses is permitted, causing confusion for many as to what uses are now available to them.
What does the future hold?
The transitional period will end on 31 July 2021, at which point some of the existing permitted development rights will no longer have effect. The Town and Country Planning (General Permitted Development etc) (England) (Amendment) (No 2) Order 2021, coming into force on 1 August 2021, updates the position, including the removal of the right to change from class B2 (general industrial) or class B8 (storage or distribution) to class B1 (business, which now falls into class E) and the addition of a right for casinos, betting offices, payday loan shops and hot food takeaways to change to class E without planning permission.
Changes already made to allow a change of use from the new class E to class C3 (residential) will also effectively come into force on 1 August 2021, but significant concerns remain that the impact of allowing all new class E uses to change to residential will, in fact, hasten the deterioration of certain high streets, as owners embrace this often more lucrative option.
Ultimately there is still much uncertainty around the effect of class E and the updated permitted development rights. The underlying legality of the changes also remains subject to challenge, with a hearing due in the Court of Appeal later this year. With all of this in mind, we will have to wait a little longer to see whether class E really can deliver the rejuvenation of the high street or whether its breadth is in fact its Achilles’ heel.
Rosie Shields is an associate at Hogan Lovells
