New planning rules leave pubs ale-ing

New planning legislation took effect on 21 April making it more difficult for property owners to change the retail use of their restaurants, pubs, cafs and takeaways in a move that could potentially affect property values.

The government's "Use Classes Order" changes the old three-class hierarchy of retail use into a new, five-tiered system, leaving general retail in class A1 and banks and building societies in class A2, but expanding the old class A3 designates into three new categories.

Whereas in the past there has been one use class that covered pubs, restaurants, cafs and takeaways, they will now be broken out so that restaurants and cafs remain in class A3, drinking establishments make up a new class A4 and hot food takeaways fall into class A5.

The expansion of the old class A3 is expected to cause commotion, however, as businesses and potential entrepreneurs unacquainted with the change now face restrictions from changing the use of their premises.

Most strongly hit by the change in law will be restaurant premises, which will be restricted from switching or extending their use to takeaway or wet-led operations without first obtaining planning permission.

Takeaways, pubs and other drinking establishments, conversely, will be permitted a one-way switch to restaurant operations, but to change back owners will then need to seek planning permission.

Planning fees also rose from 21 April, with change of use application prices increasing from 220 to 265.

Experts warn a period of confusion will reign in the wake of these new rules until property owners and planning commissions debate and determine which businesses fall into which classifications.

A restaurant, for instance, that only serves food at lunchtime and becomes a bar in the evening may struggle to find its place within the new definitions.

"Questions have been raised in terms of what happens if a pub makes 60% of its business serving food," said Christine Milburn, spokeswoman for the Beer and Pub Association. "The existing primary use will help to determine the appropriate classification.

"Some account may be taken of factors such as whether the majority of customers on the premises are consuming alcoholic liquor exclusively, whether there is a public house licence and whether there is any obligation or expectation for customers to consume a meal."

Property values, however, could be the first casualty for many business owners, before they've even considered their definition and a change of retail use.

Nicola Raistrick, a planning solicitor with Dorset-based firm Lester Aldridge, warned, "These changes will have a potential impact on the value of properties within certain classes as the range of permitted uses within these classes will narrow."

Properties with flexible use definitions, such as the general retail businesses within class A1, are more valuable and easier to sell. For owners of property accommodating restaurants, pubs or takeaways, they risk difficulties selling to prospective buyers who will now face a tougher battle with the local council should their business plan differ from a premises' current operation.

Though confusion will abound initially, property experts have proffered ways around it. Prospective buyers and licensees are advised to "test the water" by applying for a certificate of lawfulness from a local planning department.

At a recent conference discussing the rules change, Keith Miller, a property expert at licensing solicitors Joelsen Wilson, said, "If you are running an operation between a pub and a restaurant and you want to convert all or part of it into a pure pub, you should confirm what you are doing is authorised.

"It would be safer and cheaper to go for a certificate of lawfulness rather than facing a planning application. If this is turned down, at least you'll know where you stand."