A Simplification in Change of Use... or is it?

Economy Oct 18, 2013

Earlier this year the Government revised its development rights guidelines and the new, flexible Change of Use guidelines could benefit you if you are looking for a shop for your business. Buildings with A1, A2, A3, A4, A5, B1, D1 and D2 uses are now permitted to change use for a single period of up two years to A1, A2, A3 and B1 uses.

This added flexibility seems like great news for small businesses since it allows them to move into a new property much faster as there’s no lengthy planning application process to battle through first. Your new landlord / current property owner will not need to wait for you to obtain planning permission and will be less tempted to speak with other prospective tenants / buyers. Obtaining permission for Change of Use is one of the biggest causes of delays for small businesses (second only to slow solicitors!) and in some cases can lead to a landlord deciding not to consider you as a potential tenant.

However, this simplification might not be as effective as the regulator would have like. First because the landlord might not agree to a different use. In particular in a High Street. But most importantly because taking on a lease or purchasing a property without obtaining permission for Change of Use has significant risks. Indeed, if you opt to take on a shop without obtaining planning permission first, it would be wise to arrange for a tenant-only break clause in the second year to coincide with the date that you are required to have Change of Use approval. This is to protect you and your business if an application for Change of Use is unexpectedly denied.

Moreover, for shops requiring substantial investment to refurbish the property then it's probably not a good idea to take this route and you should ensure you have relevant planning permission in place before taking on the lease / buying the property. The same advice applies if you are in an area with extremely strict A1/A2 quotas or a conservation area – your local Planning Authority can inform you of any local planning restrictions which could affect your property.

For further information about the changes to Change of Use, please view the information on the Planning Portal here.


Franck Sidon

With over 15 years of experience as a Managing Director at TaxAssist Accountants, I have helped thousands of businesses and individuals achieve their financial goals and optimize their tax efficiency.