What use is a use class?
The use of properties in England and Wales is authorised by planning legislation which by and large hasn’t been updated since 1987. At a time when the high street is struggling, and operators are expected to be all things to all people is it time to overhaul the Use Classes order to suit modern businesses?
The Town and Country (Use Classes) Order 1987 (“the Use Classes Order”) sets out five main Use Classes (A-D and Sui Generis (meaning in a class of its own)) which are then subdivided (such as A1-A5). However, are these use classes suitable for modern businesses or do they prevent businesses from being fleet footed and adapting to consumer demands?
There is a distinct lack of guidance as to which businesses fall within which use class with Use Class A covering everything from retail premises through to restaurants and pubs.
Over the past 3-5 years there has been a blurring of traditional business models, driven by both consumer expectations and an improvement in technology, leading to a number of grey areas.
It is now perfectly possible for a coffee shop to operate within use class A1 in one local authority with the same concept in another local authority being required to operate within use class A3; and that’s without even considering the new breed of immersive dining experiences…
Billy Wright from Savills commented “with sought after prime A3 premises being more difficult to obtain than A1 retail premises I’ve seen clients look to adapt their business models to fit within the constraints of A1 use class - with some operators pushing this further than others…
Some are able to trade from A1 premises without any issues; while others see their plans curtailed by that local authority’s interpretation of the Use Classes Order. This has led to the wholly unsatisfactory situation where operators have to delay their roll out programmes to both tailor their offering to a specific local authority’s requirements and apply for planning”.
Aside from the time and expense incurred in obtaining planning permission for a change of use (not to mention complying with any conditions which may be imposed) the limited supply of A3 premises means they command a higher rent, as well as business rates. This can then amount to significant cost savings if you are able to operate within the confines of an A1 premises.
The insatiable rise of Deliveroo and other third-party delivery providers has also created its own issues. Restaurateurs typically sign up to the platform to supplement their core business, however, it has been known for the increase in takeaway trading to cause a business to be considered as an A5 (hot food takeaway) operator instead of a traditional restaurant.
For those operators who lease their premises the arbitrary re-designation by a local authority could put them in breach of the terms of their lease. They will then require Landlord’s consent to regularise the position with all associated costs being covered by the tenant.
During the current crisis on the high street perhaps it’s time to do away with Use Classes A1-A5 leaving Use Class A to encompass everything from retail through to hot food takeaway. This would enable businesses to adapt quickly to a change in market conditions or consumer trends whilst local residents would still have comfort that the operator’s premises licence can be used to control the permitted activities on site.
Billy Wright is a food and beverage consultant at Savills and helps independent and national operators locate their next site. If you would like Billy to assist you in finding your next premises please call 020 7409 8084 or email billy.wright@savills.com.
Alex Hutchings is a partner in the Commercial Property department of CBG Law and specialises in advising restaurants and coffee shops on all aspects of their property needs from acquisitions through to disposals. If you would like to discuss how CBG Law could assist your business, please contact Alex on 020 7462 6961 or ah@cbglaw.co.uk.