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Changing offices to residential use without planning – how easy is it?

building

building“Promoting regeneration” is the self-confessed motive behind the government’s much publicised initiative which came into force in the spring of 2013 allowing a change of use from offices to residential (B1(a) to C3) without the need to apply for planning permission.

The changes were made under the General Permitted Development Order and will initially apply for a period of three years when the government will decide whether the new rights should be extended indefinitely.

In a world where office investments have been performing badly with low demand for new office space, plus a stringent vacant property rates regime, converting offices to residential will be tempting where demand for residential property has never been higher.

Developers and investors – take note of the prior approval process from B1(a) to C3

However, investors and developers who see this as an opportunity to change a B1(a) office use to a C3 residential use without the need for a planning application need to be aware that there is a limited prior approval process.  This is not the same as lodging a full planning application as it will only relate to:

  • Significant transport and highway impact; and
  • Safety hazards zones, high flood risk areas and land contamination.

A full planning application will be needed for any external works that are required to facilitate the change of use including works that materially affect the external appearance of a building and other external building or engineeringworks.

Points to consider:

  • Community infrastructure levy: If the Local Authority has adopted CIL and this imposes a charge for residential floor space, then there may be a CIL charge unless the building has been in continuous use for at least six months in the previous 12 months before the change of use.
  • SDLT: If you are a developer buying the building will SDLT be payable at the higher rate applicable to residential property?
  • VAT: If you are a developer buying the building you may need to disapply the option to tax.
  • Leasehold: What if the property to be converted is leasehold?  Landlord’s consent will probably be required to carry out the works and change the use permitted by the lease.
  • Conversion of part: What if the intention is only to convert part of the building into residential units?  Provision of services and the charges for those services as between commercial and residential premises will need to be thought through.

Conversion from other commercial uses to residential use

What about changing other class B uses apart from office use to residential use?  Such conversions will need to be done in accordance with paragraph 51 of the National Planning Policy Framework which requires the planning authority to view the application positively.  However, note that where a planning application is required (as oppsed to where the change is through PDR), the developer needs to establish whether the proposal triggers a requirement to provide affordable housing and consider the impact on viability.

Change of use to promote regeneration – certainly.  But would-be developers need to cover all the bases before they charge ahead. Contact us for up to the minute advice.

By Elizabeth Deyong, Head of Commercial Property at Cambridge solicitors Barr Ellison.

Disclaimer: While we do all that is possible in terms of ensuring its accuracy, this blog contains general information only. Nothing in these pages constitutes legal advice. You need to consult a suitably qualified lawyer from the firm on any specific legal problem or matter.

 

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