Permitted development for office conversions to be permanent

The long-awaited announcement of the proposed extension or removal of the May 2016 deadline for the completion of the residential conversion of offices finally came yesterday in a press release issued jointly by 10, Downing Street and De-CLoG. The measures that were announced are far more wide-ranging than this, and include a new Housing and Planning Bill and a whole raft of other planning changes, which we shall have to get to grips with in the coming months.

With preparations for the publication of my new book at an advanced stage, I have inevitably been focused on this topic for the past few weeks, and this is likely to continue until we finally go to press. We had hoped to do this no later than the end of this week, but must first try to establish the likely timetable for the necessary GPDO amendment order. The bare bones of the government press release gave no hint of this, nor of the detailed provisions that it will contain.

The most reliable indication of ministers’ intentions was set out in their “Technical consultation on planning” of July 2014. This canvassed the proposal either to extend or to make permanent all the permitted development rights which were due to expire in May 2016. The proposal in the case of Part 3, Class O was to extend the completion deadline by three years to 30 May 2019, but there were later hints that the deadline might be removed altogether, and this is what has now been announced.

The Government’s original proposal was to amend Class O with effect from May 2016, and it was emphasised in the 2014 consultation paper that these amendments would not come into force until the existing permitted development right ends in May 2016. The amended permitted development under Class O would replace the existing right.

It was the government’s intention that the exemption of certain areas (‘Article 2(5) land’) which applies to the current permitted development right would not be extended to apply to the new permitted development right under Class O, but there are rumours that the government has been persuaded to keep these exemptions in place.

It was also proposed that in addition to prior approval of the impact of the proposed development in relation to highways and transport, flooding and contamination, prior approval would also now be required in respect of the potential impact of the significant loss of the most strategically important office accommodation. However, in order to avoid this being used as an easy excuse by LPAs to refuse these prior approval applications, this would be tightly defined. The existing general exclusions would continue to apply (i.e. listed buildings and land within their curtilage, scheduled monuments and land within their curtilage, safety hazard areas and military explosive storage areas).

So far as the potential impact of the significant loss of the most strategically important office accommodation is concerned, the relevant provision would no doubt take a similar form to the existing provisions in Class M and Class P (if this intention is now carried forward into the GPDO amendment order). The list of matters requiring prior approval might therefore include an extra item along these lines :

“(d) where the authority considers the building to which the development relates is located in an area that is strategically important for providing office accommodation within Class B1(a) (offices) of the Schedule to the Use Classes Order, whether it is undesirable for the building to change to a residential use because of the impact of the change of use on adequate provision of facilities of the sort that may be provided by a building falling within Use Class B1(a) (offices), but only where there is a reasonable prospect of the building being used to provide such facilities.”

However, whether a provision of this sort will find its way into the amendment order, and the precise form it may take, remains (at the time of writing) a matter of speculation.

The government’s original intention had been to make an amending order in sufficient time to ensure that local planning authorities would be given more than a year to prepare for the introduction of the new permitted development right and, although it was not spelt out explicitly, to make Article 4 Directions where they consider it necessary to do so; but an amending order made within the remaining time before the end of May 2016 removing the exempted areas with effect from that date would leave LPAs with significantly less than a year in which to make Article 4 Directions to replace these exemptions.

Whilst Article 4 Directions could still be put in place before the end of May 2016 if LPAs were to embark on the process more or less immediately, the essential point is that they would not be able to give 12 months’ notice of those directions, so as to avoid what could potentially be very large compensation claims if planning permission is subsequently refused for the residential conversion of offices that could have been carried out as permitted development in the absence of the Article 4 Direction. The equally unattractive alternative from the point of view of the affected LPAs would be to postpone the coming into effect of any such Article 4 Direction so as to avoid the risk of compensation becoming payable, but at the risk of laying their areas open to a rush of prior approval applications for the residential conversion of offices in the formerly exempted areas in the meantime.

This difficulty could be avoided if the government were either to retain the existing exempted areas under Article 2(5) and Part 3 of Schedule 1 (as it has been suggested they now intend to do) or, alternatively, to postpone their removal from the GPDO for up to (say) 18 months, in order to give LPAs the opportunity to put Article 4 Directions in place at least a year before the protected areas lose their exemption.

The amendment order could be made and laid before parliament this week, or we may have to wait several weeks or even months before it comes forward. However, developers will wish to end the current uncertainty as soon as possible, in order to unlock the funding for these office conversion schemes that had all but dried up in advance of the original May 2016 completion deadline. If the government is sympathetic to the commercial needs of the developers, they won’t delay any longer before introducing the necessary amendments to the GPDO.

UPDATE (2.30 p.m. 13/10/15): In a press release issued this morning Brandon Lewis (the Minister for Housing and Planning) said that offices that have already received prior approval for residential conversion will now have three years to complete the conversion. No doubt all office conversions under Class O will be subject to a three-year completion condition in future (which already applies under a number of other Classes in Part 3).

Lewis has also confirmed that (as previously rumoured) the new permitted development right under Class O will allow office buildings to be demolished and replaced with new buildings for residential use, and that permitted development will also be extended to include the change of use of light industrial buildings within Class B1 and launderettes (still a sui generis use).

As I suggested above, the exemption of certain areas under Article 2(5) will not immediately be removed. I suggested 18 months’ grace, but the government has agreed to allow a three-year period until May 2019 before these exemptions disappear.

© MARTIN H GOODALL