Permitted Development - A Guide to Residential Conversions

Converting commercial real estate to residential is a great way to tap into new demand if the market is down and your investment has stopped turning a profit. It’s also a popular option for landlords-to-be because property for redevelopment is often cheaper than buying a detached house for example. Furthermore, such properties can often be transformed into multiple units and the costs also easily recouped – taking only 18-36 months on average for the conversion to pay for itself. This step-by-step guide by real estate broker Tranio.com explains what you need to know about Permitted Development Rights and how to do it legally.

Rights and restrictions

‘Permitted Development Rights’ for office property, the most popular conversion project, became a permanent addition to UK planning law earlier this year. These specific planning rights, valid nationwide, are governed by the Parliament, meaning that the local council cannot block a request unless it is located in a protected area (of natural, historical, military or scientific importance) or they have an Article 4 Direction (exceptional circumstances). In all other cases, the local council can only act on risks linked to transport (roads and highways), flooding or contamination.

Permitted Development Rights exemptions
London	– The City of London – The London Central Activities Zone: parts of the boroughs of Camden, Islington, Hackney, Tower Hamlets, Southwark, Lambeth, Wandsworth, Westminster, Newham, and Kensington and Chelsea
Kent	Areas in the borough council of Ashford Areas in the district council of Sevenoaks
Hertfordshire Hampshire	Areas in the borough council of Stevenage Areas in the district councils of East Hampshire
Lancashire	Manchester City Centre
Source: gov.uk

Applying for prior approval

Owners wishing to convert their property must submit a request for prior approval, which generally includes a written proposal describing the project and the number of residential units, a plan showing the additions and modifications to the building and contact details for the developer. Following that, local authorities put a sign outside the building to inform neighbours of the plans for at least 21 days, during which locals can submit their objections.

Facilitating the process

It is highly advisable to consult the neighbours ahead of the project so as to bring them on board with the redevelopment. By opening a dialogue, it can limit the chances of complaints and objections. The redevelopment plan will ideally respect local architectural traditions and enhance the appearance of the area, additional weapons to win over the community.

Working with local authorities

Always inform the council of possible disruptions to the road network during or after the project, as they have jurisdiction over that area. It is also worthwhile getting a Lawful Development Certificate (LDC). Although it is not obligatory, it certifies that the project doesn’t contravene any law and can be required in the future to prove the lawful purpose and operation of the building.

Specific rules by building type

Office property: as of 30 May 2016, Permitted Development Rights for office conversions (Class O) have been made permanent. Restrictions include the adverse impact of noise on intended occupiers and 3-year validity of prior approval.

Storage and distribution: conversions (Class P) are authorised until 15 April 2018 if the floor space does not exceed 500 sq m and the project falls within time restrictions governing the last date of occupation for primary or mixed–use. Leased agricultural buildings require consent from the tenant.

Light industrial: this is a new class valid (Class PA) for a temporary 3-year period starting 01 October 2017 until 30 September 2020. Conversions require a LDC and will only receive approval if the conversion project does not have an adverse impact on the sustainability of light industry in the area. The project must fall within time restrictions governing the last date of occupation for primary or mixed–use

Agricultural buildings: redevelopment (Class Q) is permitted for floor space not exceeding 450 sq m if the project falls within time restrictions governing the last date of occupation for primary or mixed–use, excluding zones of scientific interest.

Redevelopment can be a lucrative way to increase your residential lettings portfolio. However, proceeding with a conversion without the correct background checks can lead to legal issues. It is therefore imperative to consult local planning and legal specialists before engaging in such a project in order to guarantee the lawfulness of your investment.

Leigh Stewart – Tranio.com