I thought it would be a good place to start this blog with an outline of what a use class means. In the UK we have classes from B to Sui Generis and it allows all property to be categorised. Once in a category it allows developers, buyers, planning teams etc to apply the same regulations to the same type of building anywhere in the country (but there are some anomalies).
The class list covers the below categories
Use Class B – Business that supply people
B2 – General Industrial and B8 – Storage and Distribution
Various uses from shops, offices, restaurants, light industrial and much more
Use Class F1 – Learning and non-residential institutions
Schools, galleries, museums and more
Use Class F2 – Local community uses
Sui Generis – everything else!
In 2021 there was a new class added, MA which allows commercial, business and service premises to be converted to dwellings subject to prior approval only. Prior approval is a formal submission to your local planning authority and the purpose of it is to seek confirmation that specified parts of a development are acceptable, before work can commence (plainview.co.uk).
The main benefit for developers is the lead time to gain planning approval is much shorter than a full planning application. The average time for planning approval to be granted is 56 days (YYN) rather than months/years for full planning confirmation. This has a huge financial impact on a developments viability as time is money!
The new class will impact those projects mainly in city centre so will shorter lead times on a gaining conversion permission it allows a superb product at the end of the development process to be created in a fantastic location for the sale and rental market - this a developers dream. The costs for a conversion are normally lower than a new build and lenders maybe more wiling to lend, as they can see a physical element on Day 0. This will give you a large pool of lenders to approach plus who can offer better rates.
Carrying out commercial conversions means you are not competing against residential buyers so reduces your purchasing competition. As the building is already existing it may force you to be more creative with your design and therefore create unique spaces, which will help keep the rental and sales market interesting.
Any catches ...
There are few catches with this new class such as the property must have traded as a commercial premise within the past 2 years and it must have been vacant for 3 months before your planning approval application. This is to ensure that the space is not an asset to the community and redevelopment will have a positive impact on the community.
But remember always do your due diligence. Ask professionals for their opinion on your ability to gain prior approval, how long is prior planning approvals being granted in the area the property is located and ensure there is demand in the area you wish to operate.
