Permitted development rights (PDRs) allow certain changes to a building without the need to apply for planning permission. In the past, they were used primarily to allow householders to make minor improvements and extensions to their homes, however, in recent years they have been increasingly used to fast-track the change of use of commercial buildings to residential in an effort to increase housing supply.
Historically, I’ve struggled with the logic of permitted development rights (PDR) being used for much more than householder extensions. Undoubtedly, some perceive our planning system as slow, and there are many examples where that has been the case. Equally, you could argue that we have, at its best, a sophisticated decision-making process that leads to high-quality outcomes when it is given the resources to do so. Since 2019, PDR has become the government solution to speeding up the delivery of residential units through the conversion of offices, but there were over the quality of the legacy it left in particular. Following this was a series of ​‘upward extension’ PDRs that, because of the subjectivity of issues that a planning authority was allowed to consider, have not had any great effect.
In March 2021, a new PDR was introduced allowing the change of use to residential from Use Class E (comprising a vast range of commercial, business and service uses including shops, offices, restaurants, light industrial, gyms, and so on). Admittedly, I huffed at the prospect of an evening trying to get my head around how this new right would promise a lot but ultimately fail to deliver. However, this latest iteration circa ten years on, seems to be the more grown up, better thought through PDR, which might just be workable. There are technical checks, minimum size units, and a floorspace limit, i.e. objective considerations but the open-ended references to design are gone, for instance.
What interested me was how, in a Central London (especially in the Central Activity Zone (CAZ)) policy context — that almost uniformly stops residential development, for a good reason — offices are being lost. How could this PDR be a way of bringing a modest number of new homes to what is a highly sustainable location? If we are about to enter a period of slow growth, would a bit more flexibility in the planning system be advantageous instead of waiting for the local planning policy tanker to turn around?
Instinctively, by contrast, as someone who has guided many an office development through the planning system and recently listened to endless leasing colleagues telling me that there is barely a Grade A 20,000sqft office floor in the West End to be let. Surely, it can’t be a good thing for London’s competitive position that office space is being lost in this way. Having 20 new residents suddenly adjacent to an office redevelopment opportunity also would not help new space to come forward.
The right under was seen as a way of revitalising the high street. Central London, as is often the case, is a far more complex location than your average UK high street, but this is a national PDR. Just like Plymouth, Grimsby or Derby, and places like these, London has Class E space in the CAZ that is tertiary in its location and standards. Often, it’s the space you don’t want to be in, but it’s comparatively cheap, and the margins don’t encourage a great deal of future investment. However, that investment is unlocked as a series of future apartments, jobs, and homes are created.
I understand the criticism that displaced businesses need to go somewhere — and probably to more expensive locations — but there are considerable positives in delivering residential. It will put more pressure on better-located central London sites to deliver a more significant amount of office floorspace. However, due to the 1500sqm floorspace limit, I don’t suspect we are talking about strategically important losses. Due to the overall losses of office floorspace since the previous 2013 PDR (which was unlimited in floorspace), you could understand why many Central London local authorities have sought, through Article 4 of the General Permitted Development Order (known as Article 4 Directions or A4Ds) to exempt large areas of their boroughs where they have evidenced this new PDR would cause significant harm. After all, many want to live in Central London locations (or just their local centre) because there is a diversity of shops, bars and restaurants that are partly kept viable in the daytime by an office population. Plus, local authorities can retain a small percentage of business rates income.
The Secretary of State for Levelling Up, Housing & Communities has the power to modify any A4D that a local authority wishes to introduce. In this instance, their opinion was that the central boroughs hadn’t struck a reasonable balance between the need to deliver housing and the need to protect large office buildings. have been proactive, admittedly with considerable reluctance, and have sought to negotiate revised boundaries with the Secretary of State whilst we understand that others have not engaged as readily. Consequently, there are several boroughs where it remains to be seen whether the Secretary of State chooses to cancel the A4D or effectively modify the boundaries himself.
CBRE has looked at Westminster as one example. The CAZ has been modified, and whilst sensibly covering the majority of the CAZ, Opportunity Areas, International Centres and other local centres, there are large parts of Belgravia, Mayfair, Fitzrovia, Marylebone, Pimlico and Whitehall, where the PDR can now be used. Westminster also introduced a further A4D outside the CAZ that excludes local centres. Their approach seems proportionate. Of course, even within exempt areas, residential conversions can still be permitted under specific circumstances, but a conventional application must be made.
Overall, there is bound to be some concern among local authorities about the permissive nature of the process and the absence of control (or affordable housing), the right will bring new residents back into central London. This will bring investment that would otherwise not be spent on a marginal office block. It boosts the delivery of services to all residents (see the challenges of ). Given the floorspace limitation, if the Article 4 designations strike the right balance, then Class MA in a Central London context is the grown-up, savvier offspring of the 2013 experiment.