21 July 2021

Changes to permitted development rights come into effect on 1st August 2021

Some of the most significant changes to the classification system of PD in a decade are coming into effect next month. So what are the main changes and what do they mean for developers?

The new planning law enables unused commercial buildings to be changed into homes without the need for planning permission. It aims to drive an increase in new homes and increase footfall to high streets. In essence, these reforms form part of a package of government measures designed to help high streets and towns recover from lockdown and create a small-business-friendly planning regime.

Commercial to Residential

Classification of commercial properties are moving from class E to class MA (Mercantile to Abode, or in other terms, Commercial to Residential).

This means property developers can take advantage of this classification and convert retail and other commercial spaces to homes under permitted development rights without the need for a full planning process.

This is going to be a big boost for developers who will now be able to source a bridging loan for property development to facilitate a purchase more quickly as they don’t require planning permission.

Compare bridging rates and optimise them here at Propp to get an idea of what capital you’re working with so you can capitalise on these planning reforms for your next investment project.

Office to Residential

On the 1st August Class O, which facilitated the conversion of office space since being introduced in 2013 is being axed in favour of grouping Office space within Class MA.

This means developers will no longer be able to convert an office of unlimited size to a residential premises because a conversion under PD will have to be done under the new class MA (Mercantile to Abode) which has a maximum limit of 1,500sqm per building.

In essence, the changes will increase the scope of development from retail to resi while reducing the number of office conversions by imposing limits on floorspace – putting an end to poorly executed massive scale office developments that we’ve seen over the last 8 years.