From 1 September 2020, the UK government overhauled its use classes planning legislation through what was the Town and Country Planning (Use Classes) Order 1987 (as amended) and now the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020.
As a result of the changes, previous individual “use classes” B1 (offices, research and development, industrial processes), A1 to A3 (shops, financial and professional, services, food and drink), D1 (clinics, health centres, creches, day nurseries) and D2 (indoor sport, recreation or fitness) have been combined and replaced entirely under a new regime being “use class E”: “Commercial, service and business class”, under which veterinary practices also fall. Previously, veterinary activities were for the best part of three decades classed as sui generis, a Latin phrase meaning “their own kind or in a class by itself”.
What do these changes mean in practice?
For landlords, it means that their previously classed sui generis property can now cater to an array of businesses which aren’t just limited to those seeking to undertake veterinary services. The benefits can be categorised as follows:
- An increase in the commercial valuation of the property which can now be tenanted by a breadth of businesses and service providers thereby increasing its attractiveness as a rental or purchase proposition
- Any rental valuations and appraisals for new or existing occupational interests would see an increase to reflect the landlord’s ability to easily let the property to a wider demographic
Conversely, those owners who had invested to achieve a desirable use change to attract specific clientele would no longer have an upper hand in the market as the desirability element has now become redundant, given the changes.
As a matter of caution, a landlord should seek to expressly limit the extent of the permitted use within the lease documentation where they are granting interests in land as the planning system is no longer a deterrent for tenants who may look to change this throughout their contractual term. The risk is for the property to be used for a purpose which it may not be fit for or envisaged by its owner.
For tenants, the changes allow them to survey a wider range of properties and locations which now come under the umbrella of use class E, which may not have had the correct permitted use for veterinary activities prior. Moreover, a tenant may at any point throughout their contractual term decide they want to change their location, for example to scale up or down and would therefore need to assign their interest to another, the changes create a less restrictive demographic to whom their lease will appeal to, making it easier for an entity or individual to dispose their interest. Tenants should, however, be aware that they may experience less favourable lease/occupational terms from landlords who know their property can be occupied by several business and service providers (ie less inclined to want to grant longer leases, increased frequency of rent reviews and so forth).
For those looking to start a veterinary practice who own existing buildings in any of the use classes mentioned above (provided the use is actual and lawful), would not require planning permission for change of use to use to a veterinary practice allowing individuals to utilise existing investments to minimise overheads in any new ventures.
The overall perceived lax approach or fluidity within the use class and permitted development rights by the government is a clear incentive to maximise the use of existing buildings and assets. Namely to repurpose buildings on the high street and town centres who have either become disused or vacant given the challenging and changing retail requirements of the general public. This allows buildings to be used for mixed uses at different times of the day without the need to involve local planning authorities.
It should be noted that all applications which were lodged prior to 1 September 2020 will be treated under the old regime and use classes. The changes will also create a levelling effect of valuations for properties which sit within the new use class, pulling any monopoly or control away from those with desirable property planning designations. There are positive for landlords (rental values and overall property value) and tenants (market competition and ease of relocation, scaling up or down and ability to dispose of existing interest to a wider group of entities/traders).
