Permitted development explained

What permitted development is

Permitted development rights are granted nationally by legislation. They cover a range of works, from small householder extensions to changes of use between classes. Each right has limits and conditions, and some areas are excluded, for example certain protected areas and listed buildings. The government publishes guidance on when planning permission is required, and the Planning Portal explains common projects.

Rules differ in Wales, Scotland and Northern Ireland, and they change over time, so always check the current position with a planning professional.

Class MA: commercial to residential

Class MA allows many buildings in the commercial, business and service use class (Class E), such as offices and shops, to change to residential use. It requires prior approval, where the council considers matters including transport, contamination, flooding, noise, natural light and the impact on the area. The detailed conditions have been amended since Class MA was introduced, so check the current version.

Homes created under permitted development must meet national space standards. See commercial to residential finance.

Prior approval and Article 4 directions

Prior approval is not full planning permission, but it is a formal decision the council must make on the specified matters. Lenders want to see the prior approval decision, as they would a planning permission.

Councils can remove some permitted development rights in a particular area through an Article 4 direction. Before buying, check whether one applies, as it means a full planning application is needed instead.

How lenders finance PD schemes

Lenders treat permitted development conversions much like other heavy refurbishment or development projects. Smaller schemes are often funded with permitted development finance or heavy refurbishment bridging, larger ones with development finance. Expect lenders to review the prior approval, building regulations, the schedule of works, the contractor and the GDV evidence.

Some buyers acquire a building before prior approval is granted. That is a pre-planning purchase, usually funded with a bridge; see planning gain and land value.

Before you commit

• Confirm the building's lawful current use and that the right applies
• Check for Article 4 directions, listed status and other restrictions
• Take advice from a planning consultant on prior approval
• Test the scheme against building regulations and fire safety requirements
• Evidence the residential values for the finished units

When you have a scheme, compare lenders on Instant Quotes.

Building regulations and quality

Prior approval deals with planning matters. Building regulations are separate and apply in full to a conversion, covering structure, fire safety, insulation, ventilation, sound insulation between flats and more. A scheme that works under permitted development may still need significant work to meet building regulations, so cost it properly.

Lenders and buyers' mortgage lenders will expect building control sign-off and, for new homes, a warranty or professional consultant's certificate. Schemes with very small units, poor natural light or awkward layouts can be harder to sell or refinance even when they are lawful, so think about the end buyer or tenant as well as the planning position.

Common questions

This guide is for general information only and should not be treated as legal, tax or financial advice. Lender requirements depend on the property and your circumstances.