Are PD rights supporting or hindering development and economic growth?

No one in the property world will have missed the coalition government’s commitment to reforming the planning system to make it simpler, clearer and easier to use, working proactively to support economic growth and to remove “unnecessary bureaucracy”. Ideally they would like to free up planners’ time so that they can be more creative rather than controlling. The reforms to permitted development rights are crucial to this aim.

It’s still early days but are the changes actually helping to speed up the planning process and support economic growth, or are they having the opposite effect? Certainly using the words “impractical“ and “undesirable” for refusing prior approval gives the local planning authority (LPA) a very wide discretion to resist a change of use and where a change of use is permitted, particularly from offices to homes, what is the real impact for the economy?

The effect of these changes on domestic dwellings is perhaps easier to see. It is the effect of the changes in relation to business premises and agricultural land which is still to emerge. The process itself so far seems indistinguishable in practice from making a formal planning application and there are clearly unforeseen consequences starting to emerge including an adverse effect on economic growth with the removal of available business premises in desirable city centre locations.

The detail

In simple terms, permitted development (PD) rights are a national grant of planning permission which allow certain building works and changes of use to be carried out without having to make a planning application. They are set out in the Town & Country Planning (General Permitted Development) Order 1995 (GPDO), as amended. And there have been many amendments since 1995.

Focussing on the most recent set of PD rights, we have new rules relating to house and business premises extensions. The size limits and percentage increases are effectively doubled. Rear extensions of up to 8 metres on detached dwellings and up to 6 metres on other dwellings are allowed for three years from May 2013, although the cut off date will be kept under review and is likely to be extended. This does not apply in conservation areas or where there is an Article 4 direction or planning condition in place to remove PD rights. There are procedural requirements of “prior approval” and neighbour consultation.

The “prior approval” process is intended to be a quick tick box exercise. Where it is required, you cannot start your development until either prior approval is granted, a decision is made if prior approval is not required, or a period of between 42 and 56 days has passed (depending on the relevant PD rule) and no decision has been made.

Prior approval can be given subject to conditions or it may be refused on one or more of the following grounds: transport and highway impact; noise impact; contamination/flooding risks; whether implementing the PD right would remove other essential services or have an adverse effect; whether the location or siting of the building makes it otherwise impractical or undesirable for the building to change from agricultural to residential use.

The “newest” PD rights which came into force in May 2013 and March 2014 are, as you would expect, subject to conditions and limitations, to control impact, and to protect local amenity.

You may find that they have been removed by a condition on a planning permission or by an Article 4 direction, or that they do not exist because you are in a “protected area”. Certain PD rights require prior approval.

If prior approval is refused, a formal planning application will be required.

Businesses

PD rights relating to business change of use thresholds have increased to 500 square metres for permitted development for change of use from B1 (business) or B2 (general industrial) to B8 (storage and distribution) and from B2 or B8 to B1.

Offices and shops may be converted into homes. The office conversion rights are temporary, expiring on 30 May 2016, and will only apply where the building has either been in use as an office immediately before 30 May 2013 or if vacant where its last use was as an office. This will disqualify buildings that have not actually been used for offices and vacant new offices. With shops, to qualify for the conversion right it must have been a shop on 20 March 2013 and again there is a prior approval requirement. There are two major problem arising from this particular change, which we doubt were envisaged when the new rules were put into place. First, there is no provision for affordable housing (which a planning application would require) leaving the inevitable shortfall to be dealt with via an alternative publicly funded route. Secondly, allowing offices to be changed into homes will inevitably result in a shortage of prime office space affecting economic growth considerably.

Agricultural

Agricultural buildings under 500 square metres can change to a flexible use falling within A1 shops, A2 financial and professional services, A3 restaurants and cafés, B1 business, B8 storage and distribution, C1 hotels and D2 assembly and leisure.

Buildings have to have been solely in agricultural use since 3 July 2012 or they must have been used for agricultural purposes for at least 10 years before they can benefit from the right. There is a cumulative limit of up to 500 square metres within an agricultural unit. Where the cumulative area of floor space to be changed is up to 150 square metres you need to simply notify the LPA of the change. Where it is between 150 and 500 square metres the prior approval provision will apply.

An agricultural building may be changed to a dwelling house provided the site was used solely for agricultural use, as part of an established agricultural unit on 20 March 2013 or if the site was not in use on that date, when it was last in use before that date. Other agricultural buildings may qualify for residential conversion in future if the site was brought into use after 20 March 2013 , and is used for that purpose for ten years before the date the development begins.

The cumulative floor space of the existing building or buildings changing use within an established agricultural unit must not exceed 450 square metres and no more than three separate dwelling houses can be developed within an established agricultural unit. The 450 square metres limit is absolute, so that once any residential conversions carried out have reached this limit, there can be no further developments within the same agricultural unit. The rules do not apply in national parks or if the site is occupied under an agricultural tenancy.

If you simply don’t know whether development is covered by PD rights, you can make an application for a lawful development certificate for a legally binding decision, to avoid the risk of enforcement action being taken later down the line.

There are on the face of it a raft of changes, which are intended to represent a significant extension to the rights to develop without the need for express planning permission. They came on a back of raft of government initiatives aimed at kick-starting the economy through development. There are more changes to PD rights on the way. A lot of the detail is unresolved and the latest GPDO still gives councils discretion and a fair bit of leeway which is undoubtedly problematic for you as the consumer.

We will have to wait and see whether the changes will have the impact intended and indeed whether the government can resist making further reforms, rather than letting the planning regime settle. PD rights are very detailed and you need to consult the amended order before you go ahead with any proposed scheme.