Viewpoint - 11/12/2020

Commercial to housing: What could the new permitted development rights mean for town centres?

Simon Peake, Associate Director - Planning, Development and Regeneration, in our Manchester discusses the pros and cons of the Government's proposed extension to Permitted Development Rights.

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The Government is currently consulting on an extension to Permitted Development Rights (PDR) which would allow change of use from commercial, business and services (the new Class E) to residential (Class C3). Simon Peake, Associate Director - Planning, Development and Regeneration, in our Manchester office discusses the pros and cons of the proposed PDR.

Wide-ranging impact

If passed, it will effectively establish the principle for residential uses to replace shops and a range of other uses (including cafés, restaurants, offices, gyms, etc.) in town and out-of-centre locations (subject to prior approval). This is not a new Government initiative.  Shops have been subject to similar PDR rights since 2015; but the take-up by landlords, developers and investors has been limited as it has only applied to units of less than 150m².  The impacts of the proposed PDR could be far more wide-ranging.

Net reduction in retail units

The retail sector has been experiencing significant structural changes over the last decade, and the painful effects are evident for all to see across our towns and high streets. The growth of online shopping has been accelerated by the COVID-19 pandemic; as clearly demonstrated by the recent collapse of retail giants, Arcadia Group and Debenhams. But sadly, they’re not alone. In the 12 months to June 2020 there has been a net reduction of 5,350 retail units across England[1].

Addressing oversupply of commercial space

The necessity for most of us to work from home during the pandemic will probably become more commonplace in the future.  This means that, in addition to retail, we are potentially facing an even greater over-supply of commercial space in our towns in the future. In turn, this could leave landlords and pension funds with swathes of vacant space and falling rents; a potential risk that could affect us all.

Accelerating housing delivery

Further to COVID-19, the UK is currently in the grip of another crisis - a housing crisis.  Residential is an obvious solution to help address some of our long-term vacant town centre sites and properties. But, as with all new development, planning permission is required which can delay or prevent much-needed housing delivery. The PDR proposals will therefore have a positive impact on housing delivery, as it will mean that the principle of residential use would be established, making the planning process much simpler, efficient and lower risk.

Revitalising town centres

Residential development also has an important role to play in ensuring the future vitality of town centres.  The increases in catchment population and spend from more people living in our towns can help to reinvigorate high streets.  It will also help to create more sustainable centres, as people should be able to walk and cycle more easily to their local shops and services.

Maintaining the drive to ‘buy local’

But providing new residential in our towns needs to be balanced with supporting the future vitality and viability of our High Streets.  Although High Street retail may be in decline, people will always need a place to gather, to meet, to socialise, to be entertained and to access essential services in a convenient central location – whether that is in the town centre, street markets or a local parade of shops.  One of the more notable positive impacts of COVID-19 has been that more people have necessarily used their local shops and services, which has boosted the relative health of smaller centres, neighbourhood parades and “corner shops”.

Preserving ‘critical mass’

It is therefore vital that the PDR proposals are introduced with careful planning, or else they could have unintended consequences that could be irreversible. As the old saying goes, we must avoid throwing the baby out with the bathwater. Town centre businesses have always benefited from clustering together, where they can mutually support each other with increased footfall and create the necessary ‘critical mass’ needed for combined shopping and leisure trips. In the past the high street has depended on the chains such TopShop and Burtons to anchor their vitality and viability.  The future will be different. But our towns and high streets will remain important - arguably more so post-COVID – providing a diverse mix of pubs, coffee shops, hairdressers, key-cutters and other uses and services that cannot be done online and which people enjoy doing in person and with others.

Checks and balances

The danger though, is that by interspersing retail and town centre uses with housing we could be irrevocably change the nature and integrity of town centres. Once shops, shopping centres and sites on our high streets are developed for housing they are unlikely to revert back to their former uses. If residential use is allowed to spread too far within a centre, without “checks and balances”, there will come a point where the town’s critical mass and mix of uses will be lost forever and its important role and function will no longer be sustainable.  

Managing evolution

There is a clear and present need for a mix of new high-quality residential uses in our town centres to help meet housing needs and address the challenges of long-term vacant properties and failing secondary shopping streets.  But this needs to be balanced with the need to maintain the important role and integrity of our high streets, as in many cases they are the “heart and soul” of our communities.  Over time town centres will inevitably change, contract and consolidate, but this is best done in a planned and managed way.   It is therefore vital that we identify and protect those key areas where high streets are vulnerable to impacts and need to be supported.

Protecting key areas

Ideally the PDR proposals will be amended to allow local authorities (who know their areas best) to identify and protect their key high streets. For example, there were a number of locations excluded from the previous office to residential PDR including the Central London Activities Zone and central Manchester. Without this change, there remains the opportunity for Councils to use Article 4 Directions to withdraw PDR in key locations. However, these typically take 12 months or more to implement, which could leave a window of opportunity for developers when the new PDR come into force. Councils are therefore advised to think about this now and act quickly.

Supporting public services

Finally, the consultation paper also proposes extended PDR to allow schools, hospitals and other public service buildings to expand and be prioritised through the planning process. This is sure to come as good news to the NHS and education trusts.

Have your say

The Consultation runs for eight weeks and closes on 28 January 2021. We would encourage anyone with an interest in town centres and high streets to read and respond via the online survey.

How can we help?

LSH is advising town centre landlords and supporting local authorities in regenerating their high streets through initiatives such as the Future High Street Fund and the Towns Fund. If you require more detailed advice in respect of our services and / or would like us to respond to the Consultation on your behalf, please get in touch. Alternatively, please visit our Planning, Development and Regeneration web page.

[1] Local Data Company – Monthly Export (last updated: June 2020)

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