With the 'Build, Build, Build’ update, and the introduction of new use classes, permitted development rights (PDR) are back on the agenda.
We decided to have a look back at the data on PDR. Which type is the most common? Is it on the rise, or in decline? Are there still opportunities for developers?
Permitted development – the data
Permitted development change of use as we know it was introduced in 2013 (with office to resi) but with the additional change of use rights in 2014, the Government started collecting data on PDR applications.
Note: This data is for permitted development applications. The numbers might be slightly different to the actual number of developments, builds, or conversions that were completed in the same timeframe.
Of course, permitted development really covers two main scenarios:
- Large householder extensions
- Change of use conversions
The majority of applications are for household extensions
Large household extensions drastically outnumber other applications, comprising 75% of all PDR applications.
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We can see that large household extensions are seasonal (high in summer, low in winter), but they didn't go through their expected seasonal bump in June 2019. In fact they hit an all time low.
However, extensions peaked later in September 2019.
Why? This might have been due to political uncertainty around Brexit at the time, or a change in the law over household extensions at the time. (Temporary under permitted development from 2013 to 2019 but made permanent in 2019.)
But let us remove home extensions from the picture and dig into the rest of the data.
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- Change of use applications are on an overall downward trend from 1370 applications in late 2014 to 890 in the same quarter in 2019 – a 35% drop.
- Office to resi has some seasonality, but not as much as agricultural to resi, with a high in summer and a low in winter.
- Agricultural to resi applications were due to overtake office to resi applications in 2016, but then sharply dropped. This could have been due to George Osborne's second homes stamp duty hammer.
The majority of permitted development applications are approved
At an 80% acceptance rate, most permitted development applications are approved.
(Approval means either prior approval isn't required, or the application is granted.)
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Looking at the data we can see acceptance rates are above 70% for most types of applications. But not with agricultural to residential or storage and light industrial to residential applications.
These two buck the trend at around a 60% acceptance rate.
For storage and light resi, the number of applications are so low, that this should be taken with a pinch of salt. Only 706 applications have been filed since records began (compared to 15,828 for office to resi).
Agricultural to resi is worth a look. When we eliminate the applications that didn’t need prior approval, we see that the national rejection rate is nearly half at 49.5% (5904 refused to 6032 granted).
If the local authority you’re in requires prior approval for your agricultural change of use, it’s worth knowing that your odds are 50:50.
Which permitted development conversion is the most common?
Local authority records keep data on five types of residential Permitted Development applications:
- Large householder extensions
- Office to residential
- Agricultural to residential
- Retail and sui generis to residential
- Storage or distribution centres and light industrial to residential
But which is the most frequent?
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Once we remove applications involving householder extensions, we can see that office to resi is the most common PDR conversion, with over 12,000 applications.
This is followed by agricultural to resi with around 8,900 applications. Everything else is below 1,500 applications, around an eighth the number of office to resi.
The new use classes – a snapshot
In the wake of COVID-19, and a change in people's habits, the Government introduced new use classes to help reinvigorate the high street.
Looking at the data we saw that 5 million addresses will be affected by the new use classes, or 5% of properties in England & Wales.
But we wanted to get a picture of just how much the high street will change. So we drilled into the data.
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We can see shops, class A1, are the most affected by the changes, making up nearly a third of all changes. Next up are offices (B1) and light industry (B1c).
The new use classes represent a lot of opportunity for developers. Savvy ones would look for shops ripe for change on the high street.
Build, build, build
A new change from Boris's 'Build, Build, Build' speech earlier this year was the right for developers to demolish vacant buildings under permitted development, and start from scratch, rather than converting the existing building. Class B1 buildings, or offices, fall under this new opportunity.
Looking back at approval rates, 21% of office to resi applications were rejected. But, with the new rules to demolish and rebuild those 3,366 office buildings might be right back on the menu.
Also, while applications for office to resi conversions are going down, we found that the opportunity is still big. How big?
Since June 2014, there have been 12,500 office to resi applications. We found that there are still 13,200 vacant office buildings ripe for conversion under the new PDR rules.
There are more offices to be converted than have been converted since records began.
Want to make the most of permitted development rights?
If you want to know more about permitted development, what’s allowed, and how to get started, download our free Permitted Development Rights eBook.
