New Permitted Development Rights for Change of Use for Agricultural Buildings to Residential Use

The Government has introduced a raft of new permitted development rights (PDRs) over the last few months which have provided a number of new options for changes of use and brought some welcome flexibility into the planning system.

Of particular interest in the farming community is the recently introduced PDR (known as 'class MB') which allows both:

  • the change of use of an agricultural building and land for use as a dwelling house and;
  • the carrying out of the related building operations required to convert buildings.

The inclusion of building operations within the PDR is noteworthy, as in other instances only change of use has been granted the status of a PDR (for example, conversions of offices to residential). The new rights are, as with most PDRs, subject to a number of limitations.

Limitations

The "gateway" test is that the PDRs are only available where the site was being used solely for an agricultural use or as part of an agricultural unit:

a) on 20 March 2013; or

b) if not in use on that date, when it was last in use; or

c) if the site was brought into use after that date, it must have been used for agriculture for 10 years prior to the date development begins.

There then follows a series of restrictions which are relatively simply stated in Class MB. If you fall foul of any of these restrictions, then you may not use the PDRs and you will most likely have to make a planning application.

The key restrictions are:

  • The cumulative floor space of the existing building or buildings changing use must not exceed 450 square metres
  • No more than three dwellings may be created in any established agricultural unit
  • The development together with any previous development under this permitted development class must not result in more than 450 square metres of floor space within a unit having changed use under class MB.

Other restrictions apply where the land is, or was, previously included in a tenancy (see further below).

Further, you may not use the new PDRs if:

  • You have used other agricultural permitted development rights since 20 March 2013 or within 10 years of the date of development under the Class MB begins, whichever is the lesser
  • The development would result in the external dimensions of the building extending beyond existing dimensions.
  • The land or buildings are a particular class of land. The excluded types of land are: 'article 1 (5) land' – including national parks, areas of outstanding natural beauty, conservation areas and suchlike; land forming part of a site of special scientific interest; a safety hazard area or a military explosives area; land containing a scheduled monument; or listed buildings.

Equally, the building operations that fall within the PDRs are limited, in this case to: the installation or replacement of windows, doors, roofs or exterior walls, and utilities or other services. These are permitted but only to the extent necessary for the building to function as a dwelling house. Further, partial demolition is permitted to the extent reasonably necessary.

Prior approval require

As with many of the other new PDRs, class MB is subject to a prior approval process. This requires that before beginning development an application must be made to the local planning authority as to whether prior approval is required as to particular matters, being:

  • Transport and highways impacts
  • Noise impacts
  • Contamination risks
  • Flood risks
  • Whether the location or siting of the building makes it otherwise impractical or undesirable for this change of use.

Further, before beginning development an application must be made to the local planning authority as to whether prior approval is required as to the design or external appearance of the building.

The detail of the prior approval process is set out in the Permitted Development Order. Local planning authorities have been grappling with this process somewhat, as in its current guise it is a relatively new procedure. This has led to overzealousness in some areas, but the process as envisaged by Part N on the face of it is relatively straightforward, and requires little paperwork.

The local planning authority have 56 days to respond to an application for prior approval, which must be accompanied by an £80 fee, and if they fail to do so deemed consent applies. If the above procedures are successfully negotiated, development must begin within three years from either the date of the prior approval being granted, or the local planning authority failing to make a determination as to whether prior approval is to be given or refused.

Land included within, or previously included within an agricultural tenancy

It is not possible to use these PDRs where the land is included in an agricultural tenancy (whether governed by the Agricultural Tenancies Act 1995 or the Agricultural Holdings Act 1986) unless the consent of the tenant has been obtained. 

Thus where the tenancy is governed by the Agricultural Holdings Act 1986, the case B procedure will not be relevant as the landlord and tenant will have to co-operate and agree the land to come out of the tenancy and the level of compensation payable.  It also means that for a farm business tenancy, even if a landlord has a resumption of possession clause in the tenancy agreement, he will still need the consent of the tenant to rely upon these PDRs.  It might in some circumstances mean that a landlord would prefer to make a planning application.

There is a further restriction whereby these PDRs cannot be used if, less than a year before the development begins, an agricultural tenancy has been terminated for the purposes of carrying out the development, unless the landlord and tenant agree in writing that the site is no longer required for agricultural use.

There are some important points to note:-

  • It would generally not be advisable for a landlord to use the case B procedure under the 1986 Act to obtain vacant possession and then wait a year before development commences as the case B requirements state that the land must be required for a non-agricultural use at the date of the expiry of the Notice to Quit or shortly thereafter.
  • Although not explicitly stated, the inference is that the restrictions relating to land within tenancies, also relates to any part of land included within an agricultural tenancy.
  • If the tenancy has come to an end within the last year for a purpose other than development (such as the expiry of a fixed term farm business tenancy or a case F Notice to Quit under the 1986 Act), the tenant's consent is not required.  The purpose of termination must have been for the carrying out of development.  If the tenancy was terminated for any other purpose it means that the PDRs can be used.
  • The restriction only lasts for one year.  It may therefore be possible for a landlord to exercise a partial resumption clause in a farm business tenancy, re-let the holding for a year and then for the development to commence after the expiry of the fixed term farm business tenancy.
  • It is not clear whether the restrictions governing agricultural tenancies would also apply where, for example, a building had been rented for storage of machinery, grain or perhaps hay and straw.  Arguably the building is in agricultural use but it is likely to be a commercial letting rather than an agricultural tenancy pursuant to either the 1986 or 1995 Acts.  It appears that in those circumstances the restrictions on the PDRs would not apply.
  • It is also questionable whether the PDRs can be used for the purposes of converting to residential for the use of holiday lets. Whilst  holiday lets have traditionally been considered to be the same use as a dwelling house (C3 – residential), recent case law has suggested that holiday lets might be considered to be a commercial use. The upshot is that the use of a dwelling house for commercial letting as holiday accommodation might amount to a material change of use, but whether it actually does is a question of fact and degree for each case, as is often the case in planning.

Hence careful thought needs to be given to whether these PDRs are the best opportunity for conversion or change of use, particularly in light of the interaction with other PDRs.  As with any development project, consideration needs to be given to the possible tax implications both of a future sale and on death and whether short term gain is in everyone's best interests.

For further details on the new PDRs, and the prior approvals process, please contact David Richardson on 01932 687540 or david.richardson@michelmores.com.  For further details on obtaining vacant possession of tenanted land for development, please contact Vivienne Williams on 0117 906 9302 or vivienne.williams@michelmores.com.