Understanding use classes can be complicated, especially after the September 2020 changes. In this article, we explain what use classes are and how they affect your business space - whether it’s a warehouse, manufacturing, or service. We outline the differences between the old and new systems and why these changes give landlords and tenants more flexibility. If you’re thinking about changing your property’s use class, we’ll discuss the key aspects to consider and how FI Real Estate Management can support you through every step of the process. Read on to gain a better understanding of this important yet complex topic!
Use classes are a property classification system that clearly defines what types of activities can be carried out in a certain space. Each use class groups together different types of activities – for example, office, retail, and industrial. That makes it easier for owners and tenants to find the space they need. These classes are established and regulated by local planning authorities, which are responsible for controlling the use and development of properties.
It is also worth mentioning the changes introduced in 2020, which simplified the use class system. After 2020, different types of activities – such as offices, shops and restaurants – were combined into a new use class, which resulted in more flexibility. Thanks to this, property owners can adapt the space to changing market needs. On the other hand, companies can change the type of business without having to obtain additional permits.
As mentioned before – you need use classes to know what types of activities you can carry out in a certain space. If it’s about use classes in industrial real estate – it will decide on whether the space can be used for manufacturing, storage, or services. Here are some common use classes in industrial properties:
Understanding these classes can help you choose the right industrial property for your business. However, there are different types of use classes, and we will now discuss the remaining ones.
Changes to use class order from 2020 can still cause a lot of confusion. That’s why we prepared a complete overview of the current use classes along with their prior names.
|
Current use class (after 2020) |
Use |
Use class before 2020 |
|
B2 |
Industrial |
B2 |
|
B8 |
Storage or distribution |
B8 |
|
C1 |
Hotels, boarding and guest houses |
C1 |
|
C2 |
Residential institutions |
C2 |
|
C2a |
Secure residential institutions |
C2a |
|
C3 |
Dwelling houses |
C3 |
|
C4 |
Use of a dwellinghouse by 3-6 residents as Houses in Multiple Occupancy (HMOs), where a variety of people, other than family members, live together. |
C4 |
|
E |
Shop |
A1 |
|
Financial and professional services (not medical) |
A2 |
|
|
Café or restaurant |
A3 |
|
|
Office other than a use within Class A2 |
B1a |
|
|
Research and development of products or processes |
B1b |
|
|
For any industrial process (which can be carried out in any residential area without causing detriment to the amenity of the area) |
B1c |
|
|
Clinics, health centres, creches, day nurseries, day centre |
D1 |
|
|
Gymnasiums, indoor recreations not involving motorised vehicles or firearms |
D2 |
|
|
F.1 |
Schools, non-residential education and training centres, museums, public libraries, public halls, exhibition halls, places of worship, law courts |
D1 |
|
F.2 |
Shop not more than 280sqm mostly selling essential goods, including food and at least 1km from another similar shop |
A1 |
|
Hall or meeting place for the principal use of the local community |
D2 |
|
|
Indoor or outdoor swimming baths, skating rinks, and outdoor sports or recreations not involving motorised vehicles or firearms
|
D2 |
|
|
Sui generis |
Pub or drinking establishment |
A4 |
|
Take away |
A5 |
|
|
Cinemas, concert halls, bingo halls and dance halls |
D2 |
Understanding these use classes is important for property owners and tenants who plan for a variety of uses for the space.
Use classes are an important legal indicator for your business. These guidelines help you understand what activities are permitted in leased or purchased space. Following the correct use class is needed for your business continuity, as operating outside of the specified use class can lead to legal issues, financial penalties, and business interruption.
Companies often consider reclassifying their property to better adapt the space to growing needs or new directions of development. Business growth, changing operational needs, or expansion into new markets are common reasons for companies to make this move. By reclassifying the space, it can serve new purposes, which supports flexibility and adapting to dynamic market conditions.
Reclassifying the space allows companies to adapt the space to grow their business or introduce new product lines. For example, a manufacturing company may need additional space for new equipment or production lines, and reclassifying the space will allow the space to be legally designated for these activities.
The growth of e-commerce and the growing demand for logistics services can push companies to reclassify the space. For example, space previously used for warehousing can be converted to light manufacturing, allowing for more efficient order management and faster customer service. Changing the use class allows companies to adapt to changing trends and make better use of available space.
Changing the use class of a property is a big decision and requires a lot of consideration. Before taking action, it is worth considering all the factors that could affect the implementation of such a change.
Local planning authorities will be the ones approving changes to the use class. It is necessary to comply with their requirements and obtain the appropriate permits. In some areas, there may be zoning restrictions that affect the type of activity that can be carried out on a certain industrial property.
The new use class may require modifications to the building, such as increasing storage space or adapting the space to higher safety standards. It is worth considering carefully what changes will be necessary to let the space be used for the new purpose. Examples of requirements may include:
Keeping up with environmental standards, including sustainability and energy efficiency standards, is becoming increasingly important. Industrial spaces must meet increasing ecological requirements, which not only helps protect the environment but also has a positive impact on the company's image.
Not always. Some changes within the same use class or between compatible classes may not require planning permission, thanks to "permitted development rights."
However, for significant changes, such as converting a warehouse (Class B8) into a café (Class E), you will likely need approval from your local planning authority.
The timeline can vary depending on the complexity of the change and local planning authority processes. On average, it can take 8-12 weeks from the submission of your application. FI Real Estate Management can help with this process to avoid delays.
Are there costs involved in changing the use class of a property?Yes, there are typically costs involved. These can include planning application fees, consultancy costs, potential building modifications, and other compliance-related expenses.
What happens if I operate outside the allowed use class?Operating outside the permitted use class can lead to enforcement action from local authorities, including fines or being required to cease the activity.
FIREM specialises in supporting companies in the change of use class process, making sure we follow the regulations and efficient implementation. Thanks to our experience, we can help you through all stages of the process, minimising the risk of delays and additional costs.
With FIREM, changing the usage class becomes simpler and more effective. Contact us to get professional advice.