News Type: Legislation Update

Rights Community Action RCA have today announced that their High Court challenge to the Government’s changes to the Permitted Development (PD) rights has been unsuccessful.

The case challenged the lawfulness of three Statutory Instruments (SI), brought in by the Government to shake up the planning system, namely:

(i)                  The Town and Country Planning (General Permitted Development) (England) (Amendment) (No. 2) Order 2020/755 which allows for the enlargement of a dwellinghouse by the erection of up to two new storeys on top of the highest existing storey of the dwellinghouse or above a detached or terraced building used for commercial purposes;

(ii)                The Town and Country Planning (General Permitted Development) (England) (Amendment) (No. 3) Order 2020/756 which relates to the creation of Class ZA PD right whereby a single detached building can be demolished that was in use as an office, for research and development purposes, or for industrial processes or the demolition of a free-standing purpose built block of flats, and the subsequent replacement with an individual detached block of flats or a single detached dwellinghouse within the footprint of the previous structure. The right also enables works for the construction of a new building that can be up to two storeys higher than the original building, with an overall height limit set at 18 metres;

(iii)               The Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020/757 which replaces several use classes with the broader Class E (Commercial, Business and Service) meaning changes within this new class will now not be termed ‘development’ and no planning permission will be required.

The claimant had sought to quash the SIs on the grounds of inadequate environmental assessment, equality issues and lack of consultation.

The High Court Report, issued today, reinforces the notion that the Court’s role is to rule on the legality of procedural matters and not on political, economic and social decisions. The Court concluded that European law did not require corresponding environmental assessment and that the Government had indeed attributed due regard to the equality impacts. Further, the Court affirmed that in the context of the ongoing pandemic the reasons given for departing from the promise of further consultation were good and were proportionate. Changes to PD rights were held as essential in the effort to stimulate the economic recovery. Simon Gallagher, the Director of Planning for MHCLG, argued in his witness statement that the Government was forced to intervene in response to the pandemic, with the MHCLG conscious of unprecedent challenges faced by the construction industry. To this end, additional PD rights for the redevelopment of vacant buildings for residential use alongside the introduction of the comprehensive Class E use class concerning business, commercial and service uses was introduced. Indeed, explanatory Memorandums outlined how these measures would boost housing delivery whilst protecting the green belt and would spur on the economic recovery. In response, the High Court Report affirmed in paragraph 138 “that was a proportionate course of action in the circumstances”.

In response to today’s announcement RCA have reinforced their commitment to pursuing the cause, stating that the changes represent a reduction in public rights; the environmental lobbying group contend that using the pandemic as a guise to push through such radical reforms is not acceptable. Leigh Day, representatives for RCA, stated today that the Strategic Environmental Assessment Directive does apply to the SIs and they will seek permission to appeal on this ground. Thus, whilst the case has failed in the High Court, it looks likely that there will be a further challenge and the matter is not settled yet. In the meantime the new permitted development rights can be used, but watch this space.

·         The full High Court Report, reference: [2020] EWHC 3073 (Admin), can be accessed here: http://www.landmarkchambers.co.uk/wp-content/uploads/2020/11/Rights-Community-Action-v-SSHCLG-FINAL-15-11-2020.pdf

·         RCA Press Release as of 17^th November is available at: https://rightscommunityaction.co.uk/latest-news/judicial-review-lost-but-we-intend-to-appeal/

·         The Press Release from Leigh Day, representatives for RCA, is available at: https://www.leighday.co.uk/News/Press-releases-2020/November-2020/Campaign-group-seek-to-appeal-judgment-on-changes

·         RCA’s claim is available at: https://rightscommunityaction.co.uk/latest-news/planning-judicial-review-pre-action-protocol-letter-issued/

Additional recent amendments to the GPDO

Further changes to the GPDO have also been confirmed. The Government announced the requirement for National Space Standards to be applied to PD conversions to residential use,  although this requirement will not come into force until 6th April 2021. The aim is to prevent unsuitable ‘rabbit hutch’ style development.

The temporary PD rights for change of use to a takeaway has been extended to 23^rd March 2022, nevertheless restrictive conditions still apply.

Pillar 3 of the ‘Planning for the Future’ White Paper outlines radical proposals to scrap the existing Community Infrastructure Levy (CIL) and Section 106 Planning Obligations and replace it with an all-encompassing Infrastructure Levy.  The Government is clear that the new Levy is intended ‘to raise more revenue than under the current system of developer contributions, and deliver at least as much – if not more – on-site affordable housing as at present’.  But how will the proposed Infrastructure Levy work and will it address the problems with the current CIL and S106 regime?

The current system

The CIL was first introduced via the Planning Act 2008 and subsequent Community Infrastructure Levy Regulations 2010 with the most recent amendments occurring in 2019. CIL is currently discretionary in principle and enables a Local Planning Authority (LPA) to levy a fixed charge per sqm of new floorspace which can vary across location, size and type of development and is intended to fund local infrastructure and support development.  Conversely, S106 (previously S52) agreements have been around for many years and take the form of a negotiation between the LPA and applicant, designed to render schemes acceptable through site specific mitigation.

So, what was wrong with the s106 system and why was CIL introduced?  Well, as S106 agreements focus on site specific mitigation, each agreement needs to be negotiated individually with the LPA which, as many developers will know, is often a time consuming and somewhat unpredictable process. The CIL was introduced to allow LPA’s to charge a fixed rate depending on the size and type of development with the aim of creating a faster and more transparent system.  However, the CIL itself has been criticised for being inflexible in the face of changing market conditions and, despite several reiterations to the CIL regulations since its conception, there continues to be an inconsistent uptake characterised by regional disparities, with around half of LPAs still not having a CIL charging schedule.  The other big issue is that affordable housing cannot be delivered using CIL.  S106 agreements therefore remain a necessity for many developments.  In fact, contributions worth a total of £7bn were secured in 2018/19, of which £4.7bn was in the form of affordable housing contributions.

As a result, we are currently left with two routes for LPAs to secure developer contributions, both of which have their own set of issues and limitations.

The proposed Infrastructure Levy

Ergo, amongst the wider reforms set out in the ‘Planning for the Future’ White Paper, Pillar 3 proposes to replace both CIL and S106 obligations with a mandatory nationally-set value-based flat rate charge, termed the Infrastructure Levy. This consolidated levy features several key distinctions. Firstly, the new Infrastructure Levy is to be charged as a fixed proportion of the development value above a threshold. This minimum threshold, below which the levy will not be actioned, is designed to protect low viability developments. Crucially, the Infrastructure Levy would be levied at the point of occupation, to be charged on the final value of a development. This amendment is intended to aid the development industry by smoothing over any potential cash-flow issues associated with having to pay CIL at the point of commencement. Further, LPAs would be allowed to borrow against Infrastructure Levy revenues in the interim to facilitate forward funding infrastructure, hence ensuring off-site infrastructure is delivered in a timely way. Another interesting suggestion is that any affordable housing provided on site could be off-set, meaning it would be deducted from the value of future Infrastructure Levy liability.

The Infrastructure Levy is to be more comprehensive in scope with current exemptions potentially under review. Government is discussing capturing changes of use through permitted development rights. To this end, additional homes delivered through this route would bring with them support for new infrastructure. Of note, the levy would apply to changes of use and not just the creation of new floorspace. The London Mayoral CIL and similar strategic CIL in combined authorities could be retained to support the funding of strategic infrastructure.

Designed principally to reduce time spent on negotiating S106 agreements and inefficiencies in capturing land value uplift, MHCLG intend the new levy to be transparent, consistent and buoyant, whereby the system is flexible to macroeconomics thereby supporting competition in the housebuilding industry. There is a palpable drive to both increase more revenue than the system at present and to deliver more on-site affordable housing. It is suggested that the LPA will be attributed with greater discernment concerning how developer contributions are to be utilised. The Infrastructure Levy would be available for wider purposes than CIL with Local authorities having the flexibility to use this funding to support both existing and new communities. Indeed, the White Paper highlights the aspiration of the Infrastructure Levy being responsive to local needs with revenues continued to be collected and spent locally. Conversely, experts have questioned whether LPAs may lose flexibility in terms of being able to set differential rates for different types of floorspaces.

Potential implications

From a developer perspective the reforms would bring certainty of cost, given that it would be easier to see upfront what their commitments would be, with levy rates fixed at the grant of planning permission. However, owing to the absence of a site-specific viability process at the application stage, the rate of the Infrastructure Levy in policy would be very important; the rate cannot be set too low or too high as there would be no viability process to act as a safety valve.  It is also difficult to see how a nationally- set flat rate can reflect local circumstances.

Unlike the current CIL, the Infrastructure Levy seeks to encompass affordable housing which is often the biggest financial contribution sought by an LPA and frequently takes longest to negotiate.  This is, however, likely to be easier said than done and the finer details on how affordable housing will be secured on site via the new levy will to be critical. Questions also arise such as whether the new levy would be payable in instalments and, significantly, whether the removal of viability assessments will actually help facilitate easier development that is more likely to be delivered (or make it more difficult to deliver schemes which fall just above the proposed minimum threshold). Ultimately, the central issue is how to effectively balance flexibility for local authorities against delivering certainty for developers and communities alike.

The reforms are certainly ambitious and are an opportunity to capture more of the share in the uplift in land value linked with development. Nevertheless, will the all-encompassing Infrastructure Levy work in practice? Or will the alternative option whereby the Infrastructure Levy will remain optional to be set by individual LPAs prove more enticing in reality?

We await the results of the consultation for these proposals which runs until 29^th October 2020.

Planning for the Future White Paper can be accessed at: https://www.gov.uk/government/consultations/planning-for-the-future

Today, new regulations come into force which significantly streamline the use classes order.

Use classes A1, A2, A3, B1 (a, b and c) and certain uses within classes D1 and D2 are now subsumed into the newly created Class E. As a result, commercial units operating under these existing uses are now able to switch flexibly between a wide range of town centre uses without applying for planning permission.

There are detailed provisions which provide clarity on how and when the changes take effect within the transitional period, namely:

– From today, all buildings and land operating under the above use classes transfer to the new Class E. Changing to another use within Class E is now possible without planning permission;

– Buildings/land not currently operated under their permitted use must be brought into that use prior to changing use within Class E;

– From today until 31 July 2021, change of use PD rights described in the GPDO will be applied based on the existing use classes, as they existed on 31 August 2020. New PD rights are to be introduced from 1 August 2021;

– Applications for planning permission, permission in principle or approval of reserved matters under an outline application, submitted before 1 September 2020 and referring to the existing use classes, must be determined using the existing use classes;

– Planning Practice Guidance has been updated to reflect the new changes as they come into effect today.

We look forward to working with clients to use the new use classes and to seeing how these changes will reinvigorate the high street. If you have a building that requires a change of use and are unsure where it fits into the new system, please get in touch with the Firstplan team.

New legislation laid in Parliament yesterday includes the introduction of the Class AA permitted development right which provides for the ‘enlargement of a dwellinghouse by construction of additional storeys’, to take effect from 31st August 2020. With prior approval from the Local Planning Authority, homeowners will soon be able to add immediately above the topmost storey: a) up to two additional storeys on pre-existing dwellinghouses of two or more storeys; and b) one additional storey on existing dwellinghouses comprising one storey. Existing accommodation in the roof space, including a loft extension, is not deemed a storey for the purpose of this right. The legislation, applying equally to detached, semi-detached and terraced houses, stipulates that the additional storeys are to be of a similar appearance in terms of exterior materials and that the development must not feature a window in any wall or roof slope forming a side elevation. Further, the roof pitch of the main part of the dwellinghouse post construction must be equal to the roof pitch of the existing dwellinghouse.

The new PD right is subject to several limitations and conditions, prohibited namely to: dwellings created via changes of use; dwellinghouses situated within a National Park, AONB, Conservation Area or SSSI; and, dwellinghouses constructed before 1st July 1948 or after 28th October 2018. Indeed, dwellinghouses already enlarged by the construction of one or more storeys are not applicable. Various constraints relate to the height of the proposed roof and the floor to ceiling height of any additional storey. Within the prior approval application, due consideration must be attributed, principally, to amenity including overlooking, privacy and loss of light and the external appearance of both the principal elevation and any side elevations that front a highway.

The legislation can be assessed here:

https://www.legislation.gov.uk/uksi/2020/755/article/3/made 

With prior approval from the Local Planning Authority, Class ZA permitted development rights will soon enable the demolition of either: a single purpose-built detached block of flats; or any other single detached building falling within use classes B1(a), B1(b) or B1(c). In either case, the existing building must not exceed 1,000 square metres in footprint, and must have been vacant for a period of 6 months prior to the application for prior approval. In replacement of the demolished building, the PD rights will permit the construction of either: a purpose-built detached block of flats; or a single purpose-built detached dwellinghouse. Class ZA also covers operations ‘reasonably necessary’ for the proposed demolition and replacement construction. These include works to remove and reinstate access, egress, plant and services.

As with all new permitted development rights, there is a comprehensive list of criteria to which the existing site and building must adhere in order to benefit from Class ZA. In particular, the building must have been in existence on 12 March 2020 and have been constructed on or before 31 December 1989. The rights also do not apply to buildings in protected areas such as conservation areas, AONBs, National Parks and SSSIs. On sites which do meet the criteria, developers will be able to construct new buildings with two additional storeys above the number of storeys of the existing building, so long as the new building does not exceed the footprint of the one it replaces.

A full copy of the regulations, which come into force on 31 August 2020, can be found here:

https://www.legislation.gov.uk/uksi/2020/756/pdfs/uksi_20200756_en.pdf

The Government laid new laws in Parliament today (21 July) to ‘extend homes upwards and revitalise town centres’.  Whilst it is the introduction of new permitted development rights to demolish and rebuild unused buildings as homes and allow homeowners to add new floors to their homes that have made today’s headlines, it is the changes to the Planning Use Classes Order that are perhaps the most radical amendments.

Coming into force on 1st September 2020, the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 (2020 No. 757) will significantly shake up the Use Classes Order.  In short, the regulations seek to ‘amend and simplify’ the system of use classes in England by creating a new broad Class E. ‘Commercial, Business and Service’ use class which incorporates:

– Retail (previously A1)
– Restaurant (previously A3)
– Financial and professional services (previously A2)
– Offices (previously B1)

Along with other uses previously in Class D1 & D2 and other uses which are ‘suitable for a town centre area’ including:

-Indoors sport, recreation and fitness facilities
– Medical and health facilities
– Creches and day nurseries
– Research and development facilities
– Light industrial uses

The Explanatory Memorandum states that:

‘This new class allows for a mix of uses to reflect changing retail and business models. It therefore, recognises that a building may be in a number of uses concurrently or that a building may be used for different uses at different times of the day. Changes to another use, or mix of uses, within this class do not require planning permission. Bringing these uses together and allowing movement between them will give businesses greater freedom to adapt to changing circumstances and to respond more quickly to the needs of their communities’.

A series of more protected ‘community uses’ have been moved into a new Class F. ‘Local Community and Learning’ use class. Class F.1 includes schools, galleries, museums, halls, libraries and places of worship. Class F.2 includes essential isolated shops, community halls, outdoor sports facilities and swimming pools/skating rinks.

The residential (C classes), General industrial (B2) and Storage and distribution (B8) use classes remain unchanged (except for a new cross reference in B2 to the new ‘commercial’ class).

The former A4 Drinking establishments and A5 Hot food takeaway use classes have been removed and will be considered ‘Sui Generis’ uses as will cinemas, concert, dance and bingo halls which fell within the former D2 use class. This will mean that changes to and from these uses will be subject to full local consideration through the planning application process.

Importantly, the new regulations include transitional provisions.  Paragraph 7.10 of the Explanatory Memorandum explains that:

‘There are a number of permitted development rights which grant general planning permission allowing changes of use between the former use classes without the need to submit a planning application. These regulations provide transitional provisions which retain the effect of the permitted development right based on the classes that were in place prior to these regulations coming into force. A building or use will continue to be subject to any permitted development rights that it was entitled to on or before 31 August 2020. These transitional provisions will remain in place until 31 July 2021 when new, revised permitted development rights will be introduced. These savings provisions also apply to relevant Article 4 Directions’.

Unfortunately, there are no current plans to consolidate the Use Classes legislation so these new regulations will sit alongside the various other amendments made to the 1987 Order.

The potential implications of these changes will take some time to understand and could be far reaching. They will come as good news for many businesses and landowners by providing greater flexibility for buildings to be repurposed and adapt to changing market trends. Should you have any questions please don’t hesitate to contact a member of the Firstplan team.

See our summary of the new Class E. use class here:

Firstplan Summary of Class E – July 2020[1]

Legislative changes are being made to the General Permitted Development Order through the Coronavirus Bill 2020 (25 June 2020) from 1st August 2020 in response to concerns raised about the quality of homes delivered in some developments under existing permitted development rights for changes of use to housing.

The Government states that the measures introduced will improve the quality of new homes being delivered under permitted development rights by requiring that ‘adequate natural light’ is provided in all habitable rooms.

The Amendment Regulations introduce a new matter for prior approval consideration in respect of the provision of adequate natural light in all habitable rooms. This requirement will apply to developments to be delivered by Class M, N, O, PA and Q in Part 3 of Schedule 2 the General Permitted Development Order. These classes allow the change of use to dwellinghouses from:

– Class M: Retail shops (A1), Hot Food Takeaways (A5), financial and professional services (A2), a betting office or pay day loan shop;
– Class N: Specified sui generis uses (amusement arcade, centre or casino);
– Class O: Offices (B1a);
– Class PA: Light Industrial (B1c);
– Class Q: Agricultural buildings.

The new test will require the submission of detailed floor plans indicating the dimensions and proposed use of each room, the position and dimensions of windows, doors and walls, and the elevations of the homes. This is to enable the local planning authority to consider the provision of adequate natural light. Local planning authorities are expected to exercise their planning judgement when considering the detailed floor plans in their assessment of adequate light in habitable rooms. The provision allows local planning authorities to refuse prior approval applications where inadequate natural light is provided.

Habitable Rooms are defined as “any rooms used or intended to be used for sleeping or living which are not solely used for cooking purposes, but does not include bath or toilet facilities, service rooms, corridors, laundry rooms, hallways or utility rooms”.

The Government’s explanatory note further confirms that applications for prior approval submitted before 1st August 2020 will be determined in accordance with the right as in force at that time. This further states that those with a prior approval event (as defined in the Amendment Regulations) before 1st August 2020 may continue to rely on the permitted development right as though the amendments made by the Amendment Regulations had not been made.

Whilst the amendments are widely supported as they seek to ensure any new dwellinghouses are provided with windows and adequate natural light, there is less certainty in terms of how local planning authorities are expected to exercise their planning judgement based solely on the submission of planning drawings. No guidance is provided that quantifies what comprises ‘adequate natural light’ and it may transpire that local planning authorities will resort to requiring the submission of a daylight assessment in accordance with BRE guidelines despite this not being required by the amended legislation.

As with the other considerations of any prior approval, it is likely that the decision for any applicant will need to be made on a site-by-site basis depending on the merits of any individual scheme and/or the approach of each local planning authority, which will become clearer with time.

For more advice about this amendment or the permitted development provisions, please feel free to contact a member of the Firstplan team

The government has set out the draft Community Infrastructure Levy (Coronavirus) (Amendment) (England) Regulations 2020 which will give authorities more discretion to defer CIL payments for small and medium sized developers without having to impose additional costs on them. In addition to this, the regulations will give authorities the ability to disapply late payment interest and surcharge payments; and to credit interest already charged to developers.

The regulatory changes and this guidance apply to England only, although this yet to be formally adopted.

This guidance will come into effect when the regulations come into force and will remain in place until 31 July 2021, as the measures only apply to CIL payments that are payable on or after the date the instrument comes into force until 31 July.

In order to qualify for a CIL payment deferral, a developer will need to:

• – have an annual turnover not exceeding £45 million;
• – have been served with a CIL payment demand notice;
• – be required to make that payment between the date that the regulations are first implemented and 31st July 2021; and
• – be experiencing some form of financial difficulties as a result of the effects of coronavirus that have impacted their ability to make the CIL payment on time.

The collecting authority can request whatever information from the developer they reasonably need to consider the deferral request.

The developer should make a deferral request to the collecting authority, in writing, no more than 14 days before, or as soon as practicable after the date the CIL payment is due. If the information requested is not provided within the specified time, the collecting authority can refuse to grant a deferral request.

The authority has a maximum of 40 days to consider the application and notify the applicant of its decision to allow or refuse the payment deferral, in writing. This period starts from the day that the collecting authority receives the request for a payment deferral.

Late payment interest and surcharges cannot be charged while the collecting authority is considering a deferral request.

Should the request be granted, it can only be for a maximum period of 6 months from the date that the request was received. The authority must serve a revised demand notice which outlines the amount of CIL payable and the revised date in which the payment is due (including any late payment interest and surcharges accrued before the deferral request).

Where a payment deferral has been refused, the authority should notify the applicant as soon as practicable, and no later than 40 days after receipt of the request. The applicant must then comply with the original demand notice served before the deferral request was made; or a revised demand notice which was served after the deferral request was made but which is not related to that deferral request. Payment must be made within 7 days to avoid late payment interest.

If a deferred CIL payment becomes due during the ‘material period’ the applicant can apply for a further deferral for the same chargeable development.

The collecting authority must charge late payment interest that has accrued in the period between the start of lock (21 March 2020) and the point in which the new regulations come into force. The applicant may request that the authority credits this interest payment against the CIL amount due under the revised demand notice, known as an “interest request”. Any late payment interest that has built up before 21 March 2020 cannot be credited against CIL amount due. If the collecting authority does not consider the request appropriate and refuses it, the applicant will be liable to pay the outstanding interest in accordance with existing CIL Regulations 2010 (as amended).

Further information can be found using the following link: https://www.gov.uk/guidance/coronavirus-covid-19-community-infrastructure-levy-guidance#draft-guidance-on-the-community-infrastructure-levy-coronavirus-amendment-england-regulations-2020

The Government is looking to shake up the planning system and ‘build, build, build’.  A key change coming into force on 1 August 2020 is to create a new class of permitted development rights to make it possible to build up to two additional storeys to provide additional flats on top of purpose-built, detached blocks of flats without requiring full planning permission.

The new permitted development rights associated with these extensions include any reasonable engineering operations, access/egress (including external fire-safety routes) and storage and waste facilities.

However, the new rights are perhaps not quite so simple as they first appear and only apply in fairly limited circumstances. For instance, they only apply to purpose built detached blocks of flats constructed between 1 July 1948 and 5 March 2018 (so not conversions) and the extension must be on the principle part of the building.  The existing building must be at least three storeys high already, however the new extension must not result in the building being over 30 metres in height (excluding plant).  The rights do not apply to buildings in protected areas such as conservation areas, AONBs, National Parks and SSSIs.  The land must also not be within 3 kilometres of the perimeter of an aerodrome.

A full copy of the regulations can be found here:

http://www.legislation.gov.uk/uksi/2020/632/regulation/22/made

The effect of the permitted development rights means that full planning permission is not required.  However, prior approval must still be sought in relation to:

• – transport and highways impacts
• – air traffic and defence asset impacts
• – contamination risk
• – flood risk
• – the external appearance of the building
• – the provision of adequate natural light for new habitable rooms
• – impact on amenity of the existing building and neighbouring premises, including overlooking, privacy and loss of light
• – whether it will impact on a protected view

In considering the above matters the local planning authority can have regard to the National Planning Policy Framework.

Even though there are a lot of restrictions we are still hopeful that many of our clients will be able to use these rights to their advantage.  The devil is in the detail so if you think you have a property which might qualify for these rights then please get in touch with us and we would be happy to advise further.