2020 has seen unprecedented disruption to the commercial property market. While the shutdown of all non-essential businesses is temporary, experts are predicting that some of the changes will become permanent. According to recent analysis by Consultancy UK, reforms of planning laws are set to transform the traditional high street.
From the 1st of September 2020, significant changes to the Town and Country Planning (Use Classes) Order 1987, or UCO, came into effect. Usually, the default position of the law is that planning permission is required for any material change in the use of building or land.
The new regulations intend to make it easier for commercial tenants to change the use of their property without the need to obtain planning permission. There will be a transition period from 1st September 2020 until 31st July 2021. However, the amendments are subject to a judicial review, and at the time of writing, the outcome is unknown.
The changes seek to introduce a new flexibility which will particularly benefit town centre tenants. For example, retail premises, restaurants and gyms can become interchangeable or even dual use. With many high street shops on the brink of collapse, the new opportunities are expected to be explored and taken up by many businesses.The broader regulations mean that landlords could face reduced control over their estate. Landlords are advised to be cautious when negotiating a commercial property lease to ensure the permitted use is limited to the tenants’ business. Tenants are likely to want to retain flexibility in their lease as a precaution against an uncertain economy.
Whatever the final outcome of the changes to planning laws, the high street was already experiencing decline pre-pandemic, with an over-supply of retail units. It seems inevitable that in the future, there will be fewer national chains and a greater mix of small retail and leisure outlets.
If you are either a landlord or a tenant requiring assistance to negotiate a lease, then contact your local commercial property solicitor today.