Introduction
Understanding planning permission and permitted use classes is essential when letting commercial property. The planning classification of a building determines what activities can legally take place within the premises and can significantly influence the types of tenants your property may attract.
Landlords should ensure they understand the planning designation of their property before marketing it to potential tenants.
Planning Permission and Use Classes Explained
Commercial property use in England is governed by the Town and Country Planning (Use Classes) Order, which categorises buildings according to how they can be used.
Major reforms to the planning system introduced in 2020 significantly simplified the previous use class structure by creating a broader category known as Class E (Commercial, Business and Service).
This change allows greater flexibility for many commercial buildings, enabling certain changes of use to occur without requiring full planning permission.
1. The current main commercial use classes
he most relevant planning categories for commercial landlords today include:
Class E – Commercial, Business and Service
Class E combines many of the former retail, office and leisure categories into one flexible use class.
Typical uses within Class E include:
- Retail shops
- Financial and professional services
- Restaurants and cafés
- Offices and business premises
- Medical or health services
- Indoor sport and fitness facilities
- Day nurseries and education centres
Because these uses fall within the same planning class, many businesses can change between these uses without requiring a formal change-of-use planning application.
Class B2 – General Industrial
This class covers industrial uses involving manufacturing or processing activities that cannot operate within residential areas due to noise, emissions or operational requirements.
Typical examples include:
- Manufacturing facilities
- Engineering works
- Industrial processing plants
Class B8 – Storage and Distribution
Class B8 covers buildings used primarily for storage or distribution purposes.
Examples include:
- Warehouses
- Distribution centres
- Logistics facilities
- Wholesale storage
Residential and Institutional Uses
Some commercial buildings may fall into residential or specialist use classes such as:
- Class C1: Hotels, guest houses and short-stay accommodation
- Class C2: Residential care homes and hospitals
- Class C3: Residential dwellings
- Class C4: Houses in multiple occupation (HMOs)
Sui Generis Uses
Certain types of property fall outside the standard use classes and are classified as “sui generis”, meaning “in a class of their own”.
Examples include:
- Pubs and drinking establishments
- Nightclubs
- Petrol filling stations
- Casinos
- Theatres
- Taxi businesses
- Betting shops
- Amusement arcades
- Large HMOs
Properties in the sui generis category generally require specific planning permission for changes of use.
2. Changes of use and permitted development
One of the key benefits of the modern planning system is the flexibility provided by Class E.
For example, a property used as:
- A retail shop
- A café
- A professional office
- A health clinic
may often change between these uses without needing full planning consent.
However, moving between other categories — such as from industrial (B2) to residential (C3) or from Class E to a sui generis use — will usually require planning permission from the local authority.
Landlords should always confirm the planning position before agreeing lease terms with a tenant proposing a different use.
3. Providing planning information to tenants
Landlords should make clear to potential tenants:
- The current planning use class of the property
- Any existing planning permissions
- Whether the proposed tenant use is already permitted
- Whether a change-of-use application may be required
This information should ideally be included in the Heads of Terms (HOTS) to avoid misunderstandings later in the transaction.
If planning permission is required for the tenant’s proposed use, the parties may agree that the lease is conditional upon planning consent being granted.
4. Applying for planning permission
Where planning permission is required, an application must be submitted to the local planning authority.
Although straightforward changes of use may be relatively simple, more complex proposals may require supporting reports or professional input such as:
- Transport or highway impact assessments
- Environmental reports
- Noise impact assessments
- Structural or building surveys
- Heritage reports for listed buildings
Planning decisions typically take around 8 to 12 weeks, although complex applications may take longer.
5. Professional advice and planning consultants
Because planning regulations can be complex, landlords often seek professional advice before pursuing planning applications or major changes to their property.
Professionals who may assist include:
- Planning consultants
- Architects
- Structural engineers
- Building control specialists
- Project managers
- Quantity surveyors
- Construction contractors
Professional advice can help landlords maximise the potential value and flexibility of their property.
Summary
Planning permission and use classes determine how commercial property can legally be used and therefore play a crucial role when letting property to tenants. Recent reforms to the planning system have introduced greater flexibility through Class E, allowing many commercial uses to change without requiring formal planning consent.
However, landlords should still confirm the permitted use of their property and clearly communicate this information to prospective tenants. Where a proposed tenant use requires planning approval, this should be addressed early in negotiations and reflected in the Heads of Terms.
Understanding the planning framework and seeking professional advice when necessary can help landlords attract suitable tenants and avoid delays during the letting process.