Commercial Property News

Property Developers – Spring 2013 Change of Use Proposals

The combination of low demand for new office space, expensive empty property rates and increased demand for residential property has led many property developers to consider converting properties in order to make a significant profit out of failing office assets.

Until now, planning permission was usually required to permit the change of use from offices to residential use.  However, last month the Government announced that it was introducing new permitted development rights for a change of use from class B1(a) offices to class C3 residential use without the need for planning permission.

The new rights that will come into force Spring 2013 are subject to a prior approval procedure which will cover:

  • Significant impacts on transport and highways;
  • Development in high flood risk areas;
  • Land contamination; and
  • Safety hazard zones.

This means that developers will still need to check with the local planning authority before implementing the change and any associated external works may still require a formal planning application.

Local authorities can apply for an exemption to this new permitted development right, but an exemption will only be granted in exceptional circumstances. The grounds for applying for an exemption are that the right would:

  • Result in the loss of a nationally significant area of economic activity.
  • Cause substantial adverse consequences at the local authority level, which are not offset by the positive benefits the new rights would bring.

The Chief Planner has written to local authorities setting out how to request an exemption.  A full copy of the letter can be read here:

The new permitted development right will apply for three years, after which it will be reviewed. Following this review it may be extended indefinitely.

Importantly, the proposals will have the effect of circumventing the normal housing policy requirements such as the provisions of affordable housing, secured by design, lifetime homes and renewable energy etc.  There will be no opportunity for the local authority to seek the usual Section 106 obligations to secure community infrasctructure, schools, health and other community services funding which could significantly increase the potential profitability of projects for developers.

Myerson LLP are the premier commercial property solicitors in Cheshire and South Manchester. Our expert solicitors can advise on all aspects of commercial property law.

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