Policy Briefing: What the industrial-to-residential rule change means for planners

The new rule is meant to deliver extra housing from former light industrial sites, but its impact will be limited, says Owain Nedin.

Light industry: new PD right came into effect on 1 October 2017
Light industry: new PD right came into effect on 1 October 2017

Q What changes does the new light industrial-to-residential permitted development (PD) right introduce?

A The new right is detailed in schedule 2, part 3, class PA of the Town and Country Planning (General Permitted Development) (England) Order 2015. It allows the change of use of a building from light industrial use class B1(c) to residential use class C3, subject to certain limitations, conditions and a prior approval process. The PD right came into effect on 1 October 2017 for a three-year period.

The limitations outlined in the order include that the building must have been used solely for light industry on 19 March 2014; its gross floor space cannot exceed 500 square metres; and it cannot be listed.

Q What does the prior approval process involve?

A The applicant must submit a statement proving that the building’s lawful use is solely light industrial and that this was the case on 19 March 2014. They must also state the net increase in the number of dwellings proposed.

The local planning authority must consider whether its prior approval is required with regard to: the development’s transport and highways impacts; contamination or flood risks; and whether the change of use would have an "adverse impact on the sustainability of the provision of industrial and/or storage or distribution services". Sustainability in this sense is likely to mean an area’s ability to maintain its provision of light industrial businesses.

Development under class PA has to be completed within three years from either the date of the prior approval notice or 56 days after the council received the application.

Q Why is the government proposing these changes?

A This is the latest in a series of changes to PD rights intended to streamline the planning system and deliver extra housing. Similar PD rights have been introduced to change office, storage and distribution and some retail and sui generis uses to residential.

Q What implications could this have for local authorities?

A Authorities will need to get to grips with yet another class of PD – its limitations, exclusions and conditions. They will also need to consider the implications of the new measure and whether it is worthwhile to take action – for example, through Article 4 directions allowing them to opt out of the right – to protect any small light industrial spaces they fear might otherwise be lost.

Some authorities have already used Article 4 directions to remove the PD right. These councils have presumably identified the protection of light industrial spaces as important to avoid prejudicing their economic development objectives.

The London Borough of Islington already has a direction in force, Hounslow’s comes into effect next January and Hackney’s in May 2018 – to name a few. Such directions can be subject to veto from the secretary of state, so there is a need for local authorities to make sure they are appropriately targeted and justified.

Q Does the change present any new potential risks or opportunities for developers?

A The opportunities are much the same as those for the PD changes that have gone before. There is an opportunity for landowners to increase land value without having to go through the planning application process and be subject to a full policy test. However, there are very specific limitations and conditions to be carefully considered before proceeding.

Q How effective will the measure be in boosting housing delivery?

A This is small-scale and unlikely to even make a noticeable dent in reducing the scale of housing need. Undoubtedly, the resulting pound-per-square-foot value uplift in many areas of the UK will be attractive and will lead to sporadic development opportunities. But it may be tough to find a building that simultaneously meets all the PD right’s requirements, including being under 500 square metres, in sole B1(c) use and not deemed to impact on surrounding industrial uses. This will limit all but very small-scale development.

Owain Nedin is an associate director at Lichfields


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