New Usage Class E Provides Amazing Opportunities
Whats the New Class E all about? I'm talking about the biggest shakeup to the planning system affecting commercial property in a long time!
Lets talk about commercial property usages classes. For last 50 years, all commercial properties have been designated for a particular use, for example A1, A2, B1, D1 and so on. Traditionally you could change use within a usage class, but to change to another use required planning permission. This has lead to a lot of gerrymandering to avoid local council members sticking their beaks where they're not wanted and interfering with commerce.
The usage classes influenced the way business was done. It affected commercial property owners in many ways, for example if you had a Grocers shop and it became vacant, you then couldn’t let it to a restaurant without going thorough planning which would take months. Very few tenants/landlords want to wait that long and so for a long time it would mean the property remained empty.
Lots of D1 properties such as Dentists and GP's are in buildings not suitable for their purposes, and could easily be repurposed to an A1 Tesco Metro, however it was very unlikely that permission would be granted.
And so, the Government have done away with all of that!
Now A1, A2, A3, B1, & D1 go into a new use Class E. From the 1st of September you can convert from any use within Class E with no planning permission. Your coffee shop can cook food if it wants, your empty newsagents can now be rented to someone starting a restaurant, the list is endless.
This is fantastic news - Let commerce decide what it needs commercial buildings for not the council. If you have empty commercial buildings then why shouldn't property owners and tenants be able to decide what commercial use they are put to? Exactly.
This is going to create opportunity going forward, because as long as you have a good location, with foot fall, then you have a lot more freedom in finding commercial occupiers for your site. The number one best way of adding value to a vacant commercial property is to put a great tenant in it. Savvy investors who get to grips with the new use class E will be able to seize first movers advantage by identifying vacant commercial sites, and finding a great tenant to fill it.
Of course there are plenty of commercial property lemons out there which you won’t be able to do anything with, you want to focus on the easily repurposable commercial properties and steer clear of the rest.
This new Class E is the biggest bonfire of red tape I've seen in the commercial property world, and its exciting to think about the mass of opportunity it's going to bring.
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