On Tuesday the government laid before Parliament regulations making sweeping changes to the Use Classes Order.

The changes, which come into effect on 1 September 2020, represent a complete overhaul of the current Use Classes Order with the twin aims of:

• better reflecting the increasingly diverse range of uses found on high streets and in town centres; and
• allowing businesses the flexibility to adapt and diversify to meet changing demands.

Reforms to the Use Classes Order have been in the pipeline since a late 2018 consultation on supporting the high street. But these long-held aspirations have been fast-tracked in response to the economic shockwaves being felt in town centres across the country as a result of the COVID-19 pandemic.

All change, please

The Use Classes Order groups different uses of land and buildings into use classes. A change of use within a single use class is not considered to be development and therefore does not require planning permission.

The schedule to the current Use Classes Order sets out four main categories of use class. These are A classes (which cover retail, food and drink), B classes (which cover places of work), C classes (which cover places of residence) and D classes (which cover institutions and leisure uses).

The new regulations create:

• A new commercial, business and service use class (Class E) which incorporates the previous shops (A1), financial and professional services (A2), restaurants and cafes (A3) and offices (B1) classes. The new Class E also subsumes uses including gyms, nurseries and health centres (previously in use classes D1 (non-residential institutions) and D2 (assembly and leisure)) as well as other uses deemed suitable for a town centre area.

The new Class E is intended to allow a mix of uses to reflect changing retail and business models which increasingly call for a mix of flexible uses in different parts of a building and depending on different times of the day. The government considers that bringing these uses within one class and allowing movement between them ought to allow businesses to be able to respond and adapt quickly to changing circumstances and demands.

• A new learning and non-residential institutions use class (Class F1) which incorporates those uses from the former D1 (non-residential institutions) class which involve buildings such as schools, libraries and galleries which are regularly in the wider public use.
• A new local community use class (Class F2) which groups together those uses from the old D2 (assembly and leisure) class which involve activities of a more physical nature (such as swimming pools, skating rinks and areas for outdoor sports) as well as the use of buildings where such usage is principally by the local community.

Notably, the new Class F2 also seeks to recognise the importance of small local shops servicing the essential needs of local communities. These shops – no larger than 280 sq m and in locations where there is no commercial class retail unit within 1km – are brought outside of the scope of Class E (commercial) in an effort to prevent changes of use.

It isn't open season, however, and the new regulations also change other existing Use Classes:

• The former A4 (drinking establishments) and A5 (hot food takeaway) use classes have been removed in recognition that changes of use to and from these uses give rise to important local considerations which need management. Those concerned with avoiding the proliferation of hot food takeaways or protecting cherished community public houses will take some comfort from this. These uses, together with cinemas, concert, dance and bingo halls, no longer fall within any use class meaning that changes to and from these uses will require planning consent.

Is anything unchanged?

The residential (Class C), general industrial (Class B1) and storage and distribution (Class B8) use classes remain unchanged in all material respects.

Transitional provisions will ensure that buildings or uses will continue to be subject to any existing permitted development rights in force on or before 31 August 2020. These provisions will remain in place until 31 July 2021 when revised permitted development rights will be introduced.

What next?

The extensive reform of the Use Classes Order together with the unique economic context brought about by the COVID-19 pandemic should, in theory at least, provide the impetus for a new, flexible and agile high street.

How this plays out in practice from 1 September 2020, however, remains to be seen. At its most extreme, the sheer breadth of the new Class E could lead to a flight from a diverse mix of high street uses to an homogenous mass of the most profitable. Planning authorities fearful of this may seek to impose conditions on new consents in an effort to retain control.

Equally, flexibility in planning terms doesn't necessarily give rise to flexibility in lease user clauses. Tenants wishing to rely on newly minted permitted development rights may need to revisit the user clauses in their leases to ensure they give the requisite scope.

There is, though, huge potential for the flexibility given by the revisions to the Use Classes Order to allow traders, developers and landlords to mix uses, innovate, and revitalise high streets. The government has promised that guidance will be published alongside the regulations when they come into force. But as Parliament rises for recess, occupiers, investors and developers would do well to use the summer period to consider the opportunities brought about by the new class system.

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