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Whilst the long-term impact remains a hot topic, the conversation when discussing COVID-19 in recent weeks has tended to focus on when things would get back to ‘normal’.
So far the signs are not great for the struggling retail sector, and the statistics make for almost grim reading.
According to the Retail Gazette, footfall across the UK retail sector as a whole, measured year on year, dropped by 39% in the four weeks following 5 July. This followed the so called ‘Super Saturday’ reopening of much of the hospitality sector.
Whatever else emerges from the massive upheaval of COVID-19, it seems that the ways in which we shop and work are set to change forever.
The future needs more flexible Use Classes
The changing economic landscape will call for flexibility on the part of almost all commercial concerns, and the government has attempted to meet this need by undertaking major reforms of the Use Class Order for commercial property.
Use Class is an aspect of planning law set out in Town and Country Planning (Use Classes) Order 1987, and in England it deals with the classification of land or buildings on the basis of their use.
Planning permission is often (but not always) required to change the permitted use of a property from one thing to another. In general, if the change in use would shift the use from one class to another, then planning permission would have to be obtained.
The current regulations identify the following commercial Use Classes:
A1 – Retail
A2 – Financial and Professional
A3 – Café and Restaurant
B1 – Business
D1 – Clinics, Health Centres and Crèches
D2 – Leisure
The new planning regulations, which will come into force on 1st September 2020, will abolish these Use Classes and replace them with new and wider classes. The new Use Classes combine many of the existing classes, meaning that planning permission will no longer be required for certain changes of use, as they will now be within the same Use Class.
The new Use Classes will be as follows:
Class E – Commercial, Business and Service – properties in this class mainly comprise those that were previously in Classes A1 to A3, including shops, restaurants and cafés and financial and professional services. It also includes those in the B1 Class, such as research and development facilities and offices. In addition, Class E covers gyms, nurseries and health centres.
Class F.1 – Learning and non-residential institutions – this covers some of the uses which were previously contained in the D1 Class, and includes museums, libraries, displays of art, uses for education, places of worship, public halls and courts.
Class F.2 – Local Community – this includes swimming pools, skating rinks, community halls or meeting places and areas for outdoor sports. It also covers some local shops, although this is limited mainly to those selling essential goods including food, which cover an area of 280 square metres or less, and only where there is no alternative facility of this kind within a radius of 1000 metres.
Some uses are listed outside any specific Use Class, a status known technically as ‘sui generis’. Uses which sit outside the broader classes in this way will now include drinking establishments, hot food takeaways, cinemas and bingo halls.
Use Class changes to reflect public needs-but may cause issues elsewhere
The aim of this change is to free up landlords, business owners and asset managers to reposition properties in order to take advantage of emerging trends in the retail and leisure sectors.
It should be noted that planning permission may still be required for any works needed to effect the change in use, and that there may be further stipulations and prohibitions contained within the lease or other documents.
The changes may in turn have an unintended impact on existing leases, in terms of rent review, renewals and valuations. This will no doubt need to be monitored over the coming months.
As a property professional or tenant seeking to make better use of your building, if you would like more details on the proposed changes and what they mean for you and your business, please speak to Neil Faunch of the Commercial Property team at Ansons on 01543 267191 or email firstname.lastname@example.org
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