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Considering the conversion of commercial accommodation to residential

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By Andrew Morgan


Published 29 June 2021


Andrew Morgan, planning partner at international law firm DAC Beachcroft considers the conversion of commercial accommodation to residential. This article first appeared in an item for London First

As we continue to evolve the way we use our high streets and offices, converting them to residential accommodation is both a way to repurpose space, regenerate our urban centres and address our continuing housing shortage. A new class of Permitted Developments rights comes into effect on 1 August 2021 and is very much in keeping with the Government’s agenda on boosting housing delivery. It is an adaptation that will be most suited to more recently vacated buildings.

The maximum floor space will be 1,500 sq m, representing about 3 average sized apartments. Concerns have been expressed about the quality of accommodation these conversions have provided and local authorities will now be given greater influence over the location/context and amenity of the new use. However this update to the planning regime will not attract any affordable housing requirements.

Permitted development (PD) rights, as a form of deemed planning permission granted by statute, fulfil an important role in allowing a significant amount of development without the often lengthy delays associated with major planning applications. From 1 August 2021 a new class of PD right (Class MA) will come into being, granting planning permission for a change of use from commercial to residential. This broader class of PD right will replace all existing retail, warehouse and office to residential rights and reflects the range of commercial uses which now sit within the relatively new Use Class E. As with previous residential conversion PD rights, Class MA development will be subject to qualifications and procedural requirements which will limit the scope of use. It is by no means a rubber–stamping exercise.

The building must have been vacant for three months prior to an application being submitted and have been in commercial, business and service use for 2 years before it was vacant. Class MA is applicable in conservation areas, but not in other protected areas such as National Parks and Areas of Outstanding Natural Beauty.

As with earlier PD rights there are prior approval rules which give the local planning authority a right to object to the change of use across a limited range of matters:

  • the transport impacts of the development, particularly to ensure safe site access;
  • environmental contamination;
  • flooding;
  • noise from commercial premises on the intended occupiers;
  • adequate natural light in all habitable rooms; and
  • issues of residential amenity in areas the authority considers to be important for general or heavy industry, waste management, storage and distribution.


Planning obligations and CIL

Planning obligations can only be secured in respect of matters that are the subject of a prior approval – so Section 106 can be used to provide mitigation for impacts linked to highways, environmental, flooding, noise etc. Community Investment Levy (CIL) will technically apply, but most MA conversions will qualify for the in-use buildings exemptions; that is use for 6 months in the last 3 years prior to planning consent. This will therefore have to be considered alongside the Class MA vacancy and use requirements.