MODIFIED ARTICLE 4 DIRECTIONS: SUMMARY OF LONDON CHANGES FOR COMMERCIAL TO RESIDENTIAL PD RIGHTS

In late July, a number of new opportunities opened up in Central London to utilise the Permitted Development (PD) rights to convert commercial buildings to residential (under Class MA)

Since the introduction of PD rights in 2013, all Central London Authorities (CLAs) have issued Article 4 Directions (A4D) to restrict the use of residential conversion rights. Earlier this year, the Government instructed them to limit the geographical extent of those rights in relation to Class MA, as explained by my colleague, Tom Pemberton, here.

This post summarises the situation in each of the Central London local authorities and identifies some of the new areas, which as of 1 August 2022, are now able to utilise benefit from Class MA PD rights (subject to meeting the site-specific requirements and prior approval).

At the time of writing, the Secretary of State (SoS) has formally modified four areas at the end of July 2022 – Westminster, Kensington & Chelsea, Richmond and Wandsworth.

In summary, the modifications have resulted in:

• Kensington & Chelsea (CONTRACTION) – The whole of the borough was previously granted an exemption by the Government from office to residential PD rights in 2013. The Borough-wide A4D ended in July 2022, when the SoS modified the Direction to cover core locations within larger town centres, neighbourhood centres, employment zones and clusters of office, industrial and medical uses. However, isolated office or commercial buildings outside of these zones may have now become open to PD rights for the first time.
• Richmond (CONTRACTION) – The Council initially set out a list of 67 areas that were due to be restricted from utilising PD rights. However, the SoS stepped in and modified this to 62 smaller areas – most notably tightening the restricted areas within key town centre locations rather than blanket bans. Twickenham, Richmond, Mortlake and Teddington were reduced to specific sites within those centres rather than blanket restrictions.
• Wandsworth (CONTRACTION) – The Council previously applied for an A4D for the CAZ and 62 other sites across the borough – a mix of town and district centres. The SoS modified to reduce this area, with the most significant reduction in the area around Wandsworth Town and along the Thames. Many of the other removed areas are train lines or other peripheral lands within Nine Elms, Clapham Junction and other town centres.
• Westminster (CONTRACTION) – The previous restriction applied to the CAZ, which makes up the southern half of Westminster. The SoS directly modified this to limit it to the key centres, clusters, special policy and opportunity areas, leaving areas around west Mayfair, Knightsbridge, Belgravia, Pimlico, St James’s and a small area towards the Strand open for PD rights for the first time. WCC is currently consulting on additional A4Ds for its local and district centres in the north of the borough, which are due to come into effect in December 2022.

In other authorities:

• Camden (EXPANSION) – Camden previously restricted PD rights within the CAZ, which comprises most of the south of the borough. The latest A4D continues to cover the majority of the CAZ (minus a minor omission at Regent’s Park) but expands it to include the Knowledge Quarter, Camden Town and other district centres, as well as small clusters of office, industrial and retail buildings.
• City of London (NO CHANGE) – The whole of the City has been subject to an A4D restricting office to residential rights since its introduction, and there is no change in 2022. The City was the only authority allowed by the Government to retain its blanket A4D.
• Islington (CONTRACTION) – The borough has held an A4D for its CAZ areas since 2013 for office to residential, as well as separate restrictions on light industrial conversions across the CAZ and its key industrial locations. Islington was not one of the local authorities warned by the SoS earlier in 2022; however, its office to residential A4D expired in August 2022. Consultation is currently running in a revised direction, the boundaries of which have been drafted to cover the majority of commercial buildings in the commercial areas rather than the blanket CAZ. This change is due to come into effect in August 2023, leaving a short period with limited restrictions in the CAZ.
• Lambeth (EXPANSION) – Lambeth previously had a relatively tight-knit A4D covering Brixton town centre plus sites in Clapham, and its Key Industrial and Business Areas (KIBAs). From 2022, the new A4D expands to the CAZ and a number of other town and district centre sites. The SOS has not modified this to date.
• Southwark (EXPANSION) – An A4D was previously in place, covering the whole CAZ area for office-to-residential conversion. In 2022, Southwark introduced a new A4D which continued to cover the CAZ but was expanded to cover other commercial spaces, including the town centres, railway arches, site allocations, Strategic Industrial Land and shopping frontages. Therefore, no areas have opened up for the use of PD rights, and, to date, the A4D has not been modified by the SoS.
• Tower Hamlets (LIMITED CHANGE) – The borough previously had an A4D which covered the essential office locations around the City Fringe and Canary Wharf, plus two other key centres. In addition, it had a separate A4D restricting retail to residential PD rights in all town centre locations. The 2022 A4D effectively combines both restricted areas with limited change. To date, this has not been modified by the SoS.

In summary, four boroughs have been subject to the Governments interventions and resulted in smaller areas of restriction, opening up some opportunities for office (and wider commercial) conversion to residential. In many other locations, there may be opportunities to convert more isolated buildings that sit outside or on the periphery of town centres and other important locations.

However, some locations will now be subject to restrictions for the first time. As the Class MA PD rights provide for the conversion of all types of commercial uses under Class E, local authorities need to introduce new A4Ds to protect not only the key business and office locations but also retail areas. In doing so, many offices to residential opportunities under PD are also lost.

New Article 4 Directions will continue to be prepared, and the Government may further modify those. Montagu Evans will be monitoring any changes, but please do not hesitate to contact us if you have any queries on these areas or restrictions.