Class MA: one year on

The introduction of Class MA in August 2021 was met with mixed results by the property industry. 

Implemented as a bid to bring more flexibility and vitality to the high street (as well as delivering more much-needed housing), many worried it would have the opposite effect. 

One year on, we take a look at how much of an impact Class MA has really had.

What is Class MA?

Class MA is a permitted development right (PDR) which enables buildings classified as Class E to change to Class C3 – essentially the ability to convert commercial, business, and service buildings to residential properties. 

Although getting approval from the local authority is a lot less intensive than a full planning application, prior approval still needs to be granted. And as we see below, this often doesn’t happen. 

There are still strict requirements when it comes to natural light levels which some commercial buildings won’t easily allow. New doors or windows may need to be added, making it a bigger project than may have originally been anticipated. 

What does the data show?

When Class MA was announced back in March 2021, we saw a surge for buildings that fell under use Class E. 

In the first month alone, searches in LandInsight were up by:

• Offices – 80%
• Restaurants and Cafes – 575%
• Financial and Professional Services buildings – 696.6%

July 2022, however, tells a different story. Year on year searches for Class E are down by 81%. There could be two reasons:

• The initial enthusiasm for Class MA has died down, perhaps all the opportunities have been found? Or the barriers to entry are simply too high to be worth the effort?
• Seasonality – July is the beginning of the summer holidays after all. This year is the first year with little travel restrictions to popular vacation hotspots. The data reflects this. Year on year, searches in June are up by 70%.

Or a little of both.

We can look at the gov.uk data to see more of the bigger picture. Specifically, PDR conversions for October to December 2021. 

During this time period, approval was granted for 64 commercial, business, and services to residential conversions for all of England – with an additional 17 conversions not needing prior approval. 

The vast majority of those granted were in the South East of England (24), followed by London (12), and the East of England (11) – which could indicate where key opportunities for Class MA could lie. 

When comparing the figures with all PDR applications made for the same time period, we can see that Class MA is still being largely underused – or there aren’t enough appropriate buildings to convert. 

There were a total of 1,734 PDR projects granted approval, and a further 3,858 which didn’t require prior approval. 

London had the most approved (370), followed by the South East (281) and South West (212). 

Source: gov.uk 

What opportunities does Class MA hold for developers?

In theory, Class MA should be a win win. Housing gets created in convenient central locations. Whilst old or dormant office stock gets to be repurposed into something more useful. 

However, that’s not always the perspective taken by communities or local authorities. With the former wanting to protect their high streets and local businesses, by not having commercial stock being repurposed into housing. 

Some local authorities, on the other hand, believe that Class MA undercuts their decision making capacity and derails the Local Plans they’ve laid out. In some instances, Article 4 directions are being brought in to limit the use of PDR in a set area – 60% of London councils currently have them in place. 

If you're in an area where Class MA is looked on favourably by the local authority, then there’s still a lot of time to be saved going down the PDR route. 

You just need to make sure you’re finding properties in the right area, with the right criteria. And LandInsight can help you do just that. 

How can we help?

In LandInsight, you can use our Property Search to filter by specific Use Classes in your target areas. 

Typing in E or Commercial, Business & Service to the search bar will show you all the buildings in the area that fall into the right use class to convert to resi. Not all of them may be suitable, but it will massively narrow down your options. 

Save the site, and then head into the planning applications layer to check for any pending applications on the site or in the surrounding area that could impact your project. 

The Planning Search in the planning applications layer can also help you spot potential sites to convert. Filter by residential and E and rejected to see sites where applications have previously failed. 

You may be able to learn what not to do when seeking planning permission on this site and be able to put forward a successful application. 

The amount of approved or rejected planning applications is also a good indicator of the local appetite for Class MA and the likelihood of your project being given the green light. 

For more insight into PDR and the opportunities available download our complete guide below.