Comment
Commercial to residential Permitted Development Rights expand across London
Last week many London boroughs lost their protection against office-to-residential conversion under Permitted Development Rights (PDRs) when the transitional arrangements between Class O and the new Class MA ceased to operate. We examine below the potential opportunities arising for landowners in the capital.
Following the introduction of the planning Class E use, a new national PDR, Class MA, took effect on 1 August 2021, which permits a change of use of any land or buildings within Class E use (commercial, business and service) to residential use without the need for planning permission.
Since this introduction in summer 2021, the race was on for many local authorities to get in place new Article 4 Directions before the transitional period ended on 31 July 2022. See our previous commentary here.
Article 4 Directions allow a local authority to remove certain PDRs from specific areas. Whilst this does not prevent the change of use or development in that location, it ensures that it requires full planning permission and therefore can be more robustly scrutinised by the local authority in relation to their planning policies.
Across London, the response and position of different local authorities has varied, with the following different approaches:
- the majority who previously had Article 4 Directions in place in relation to PDR Class O (office to residential) have confirmed their new Article 4 Directions and these have now come into effect;
- there are a number who have not yet confirmed new Article 4 Directions (such as Croydon, Islington, Tower Hamlets, Hammersmith and Fulham among others);
- some have non-immediate Directions in place that are still to come into effect (such as Hackney and Hillingdon), creating a window for PDRs;
- others that previously had in place borough-wide Article 4s such as Waltham Forest, have reduced the geographical scope of the areas in accordance with the updated NPPF on Article 4 limits; and
- furthermore, the Secretary of State (SoS) has powers to modify Article 4 Directions at any time. Disappointingly for Kensington and Chelsea, Westminster, Wandsworth and Richmond, the SoS has overruled the proposals and exercised their powers to require that the Direction must cover a smaller geographical area. The City of London is now the only London authority with a borough-wide exemption in place.
This reduced scope and area either by the boroughs themselves, or imposed by the SoS, are not wholly unexpected. The Government fired warning shots back in April this year, rejecting an attempt by seven central London boroughs to introduce an Article 4 covering the Central Activities Zone (CAZ). The then Housing Minster, Stuart Andrew, reminded local authorities of the NPPF updates from summer 2021 which stated that directions should only apply to the “smallest geographic area possible” and would need to be based on “robust evidence”.
As such, as of this week, there are substantial areas across London which previously had Article 4s preventing commercial to residential PDRs that are no longer exempt (for now).
Notwithstanding this, sites wishing to benefit from Class MA still need to meet the qualifying criteria and requirements, including vacancy of at least three months, cumulative floorspace below 1,500 sq m and they must not be a listed building. An application for Prior Approval would also still be required which requires assessment of a number of technical considerations.
In this context, local authorities can still refuse proposals under Class MA PDRs. It is worth considering that of the top eight local authorities in England with the highest refusal rates of Class MA Prior Approval applications between October and December 2021, four are London boroughs[1]. As such, an absence of an Article 4 Direction cannot be considered a “free-for-all” on conversion, rather an increased opportunity.
We have provided an update on the status of the commercial to residential Article 4 restrictions for each London borough below:
If you would like to discuss whether there is an opportunity for commercial to residential conversion on your London property, please get in touch with a member of the team.
5 August 2022
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