Property Usage Classes
Something that comes up fairly regularly in conversations with clients is the classes of commercial property use. It is also something that commercial mortgage lenders use to define what they will lend for so knowing what class is what is important when buying and mortgaging.
Because it is something that often comes up then here is a quick summary. Hope it helps.
The Town & Country Planning Order 1987 puts buildings and land into various ‘classes’ which determines what commercial use can be undertaken at the site. The theory is to maintain a mix of commercial properties and ensure a stock of each is maintained.
Properties can move between classes, usually this requires planning consent however this is not always the case. The law regarding these movements between classes can change so please do check the planning portal for guidance.
Definitions of Classes
Classes of property are broken down into four main groups with sub groups in each;
- A1 Shops – General retail, hire and retail sale from premises
- A2 Financial and professional services – Banks, building societies, professional services, estate and employment agencies. Excludes betting and payday loan outlets
- A3 Restaurants and cafés – Retail of food and drink for consumption on the premises, not take away
- A4 Drinking establishments – Pubs, wine bars etc. Not night clubs
- A5 Hot food takeaways – Ronseal moment – hot food for consumption off the premises
- B1 Business – Offices which don’t fall under A2. Can include light industrial subject to local considerations such as residential area impact
- B2 General industrial – Other business use not under B1
- B8 Storage or distribution – This includes open air storage, not necessarily just warehousing
- C1 Hotels – Hotels, boarding, guest houses and accommodation. There needs to be no considerable element of care being provided to residents
- C2 Residential institutions – Care homes, hospitals, nursing homes, boarding schools etc. It can include commercial training facilities and independent teaching and colleges
- C2A Secure Residential Institution – Wide ranging class which includes things from prisons, young offender institutions, custody suites, secure hospitals or use as military barracks
- C3 Dwellinghouses – This is further broken down into 3 sections:
- C3(a) property for use by a single person or a family. This includes the occupation by au pair, nanny, chauffer, gardener or other person employed or required by the household
- C3(b) property allowing up to six people living together as a single household. This differs as it includes those receiving care, supported housing or those with learning disabilities or mental health issues
- C3(c) property allowing for groups of up to six people living together as a single household. This covers selections which don’t fall under the C4 class. It covers things like a small religious group or a homeowner with lodgers
- C4 Houses in multiple occupation – property allowing between three and six unrelated individuals who all use the property as their only or main residence. They will share basic amenities such as a kitchens and bathrooms
- D1 Non-residential institutions – Clinics, health centres, museums, places of worship, courts of law. crèches, day nurseries, day centres, schools etc
- D2 Assembly and leisure – Cinemas, music venues, concert halls, bingo, skating and swiming or other indoor recreation. This category excludes night clubs
The final class of property uses Latin, because professions like to use Latin. Sui Generis means ‘of it’s own kind’, when it comes to property and planning it refers to individual and purpose built units. Typically this refers to theatres, cinemas, casinos, nightclubs etc. Many lenders have restricted criteria for Sui Generis properties, if you are considering buying then get a finance agreement before committing.
For any queries regarding raising finance for any of the above then please get in touch.
By Dave Farmer