Planning and high street rental auctions

The introduction of HSRAs creates a potentially wide new permitted development right. Nicola Gooch looks at what this means from a planning perspective and how the changes of use might work. On 11 and 12 November, the government made two new statutory instruments bringing high street rental auctions into effect, both of which come into force on 2 December 2024: the Levelling-up and Regeneration Act 2023 (Commencement No 6) Regulations 2024 and the Local Authorities (Rental Auctions) (England) and Town and Country Planning (General Permitted Development) (Amendment) Regulations 2024. These two sets of secondary legislation contain everything needed to allow rental auctions to find their way to the high street. In particular, the second set contain details of the required auction timetable, the forms of notices required, the terms of the tenancy agreement and the terms of the tenancy itself. The planning implications A high street rental auction is a mechanism which enables councils to auction tenancies of vacant premises in designated high streets and town centres. Despite rental auctions initially being a project of the last Conservative administration, the new Labour government appears to have taken a liking to them. The government is committing more than £1m in funding to support local authorities with the auction process, to help breathe life into struggling high streets and town centres. The biggest point of interest from a planning perspective is that the government has created a new temporary permitted development right to enable the auction process. Regulation 15 makes an amendment to the Town and Country Planning (General Permitted Development) (England) Order 2015, to insert in Part 4 of Schedule 2, after class DA, class DB: “Use of qualifying high-street premises changing to a suitable high-street use.” The newly permitted development is “development consisting of a change of use of a building which is a qualifying high-street premises within the meaning of section 192(2) of the Levelling-up and Regeneration Act 2023 and any land within the curtilage of that building to a suitable high-street use (as defined by section 192(4) of the 2023 Act) for the duration of a tenancy granted following a rental auction of the premises held under Part 10 of the 2023 Act”. Development is not permitted by class DB if the premises form part of a site which is, or forms part of: (a) a military explosives storage area; or (b) a safety hazard area. Development is permitted by class DB subject to the following conditions: a. The local authority responsible for the rental auction must notify the local planning authority of:i) The suitable high-street use for which the premises will be used;ii) The date on which that use will commence;iii) The date on which that use will cease; and b. At the end of the tenancy granted in relation to the premises, the premises must revert to their former use. By way of a reminder, section 192(4) of the 2023 Act defines a “suitable high-street use” as any of the following uses for which the council considers the premises being rented to be suitable: Use as a shop or office; Use for the provision of services to persons who include visiting members of the public; Use as a restaurant, bar, public house, café or other establishment selling food or drink for immediate consumption; Use for public entertainment or recreation; Use as a communal hall or meeting-place; or Use for manufacturing or other industrial processes of a sort that can (in each case) reasonably be carried on in proximity to, and compatibly with, the preceding uses. How does this compare with class E? While there is a considerable overlap between this list and class E of the Use Classes Order, the new PDR is of wider application. The 2023 Act defines a “qualifying high-street premises” as any property in a designated high street or town centre that the council considers suitable for a high-street use – regardless of what its lawful planning use might happen to be. The new PDR does not include any physical alterations to the premises to facilitate the temporary change of use. As such, any external alterations required would need planning permission in the usual way. Also interesting to note is that the right is conditional on the premises returning to their previous use at the end of the tenancy. While this is a necessary condition, given the temporary nature of the change of use, if applied strictly it would make things tricky for any tenant that had obtained a new lease from its landlord once the auctioned tenancy had come to an end. Technically speaking, the tenant would need to return the property to its previous use at the end of the auctioned tenancy, to comply with the PDR condition, even if a new lease had been agreed with the landlord, and a planning application submitted to the LPA for a permanent change of use. Anyone seeking to rely on this new PDR will also need to make sure they have done proper due diligence into the relevant property’s planning history. After all, it would be highly embarrassing if, having gone to all the trouble of engaging with an HSRA, you were to find that the property being let had previously excluded all changes of use under the general permitted development order by condition. Nicola Gooch is a partner in the planning team at Irwin Mitchell Photo © Geoffrey Swaine/Shutterstock