Can I turn my shop into a residential property?

We saw significant changes to the commercial use classes system in September 2020. However, one of the most significant adjustments has been implemented without much fanfare or publicity. It is the change that was put in force since 1 August 2021 permitting development to convert shops into residential property; (Use class E to use class C3).

Decline of the British high street

There has been a decline of the British high street in the last decade and more so recently due to the impact of Covid-19 on the retail sector. Many establishments that had been operating for decades have also had to close their doors due to the rise of e-commerce businesses. The Government believe allowing an easy change from shop to residential might repurpose England’s high street and shopping centres.

The legislation introduces a new permitted development right that allows shop to residential. In other words, the change of use from commercial, business and service uses (Use Class E) to residential property use (Use Class C3) in England. The new rules mean that conversions from any of those uses, including retail, to residential will not require full planning permission if certain conditions are met.

There are concerns as to the impact this could have on the high street with areas traditionally used to eat out, socialise or purchase goods becoming residential enclaves. However, some retail owners will welcome this idea as it would allow them to let unpopular retail site which may have sat empty for a while.

From shops to residential property

Following the change that was put in force since 1 August 2021 permitting development to convert shops into residential, Robert Jenrick, the secretary of state for housing, communities, and local government, commented on the new rules streamline the planning process. He said: “We are creating the most small business friendly planning system in the world to provide the flexibility needed for high streets to bounce back from the pandemic. By diversifying our town and city centres and encouraging the conversion of unused shops into cafes, restaurants, or even new homes, we can help the high street to adapt and thrive for the future.”

Prior to 1 August 2021 there were still some permitted development rights allowing the creation of new homes. These include changes from Class M for ground-floor shops, Class G for the rooms above shops, betting shops and payday lenders and Class O for offices. What is different from both Class M and Class O is that these new permitted development right regulations require that the property must have been vacant for three months before any application can be made.

The question we should really ask is whether these changes will help to regenerate our city centres or will they signalling the end of the more traditional high street.

Further information

Our experienced real estate lawyers are commercially focused, providing pragmatic and proactive support to real estate assets and transactions and are experienced in many sectors, including  retail, food and restaurants. Our team advises a number of developers and also companies entering into transactions which are conditional on development works being carried out. If you need help with commercial permitted developments, please get in touch and speak to our experienced Commercial real estate lawyers.