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Classification shake-up will have major impact

17 February 2005

Blink and you might have missed it, but last week the Government finally set the date for changes to the Use Classes Order to take effect. While the announcement lacked the jamboree surrounding the new alcohol licensing regulations, experts are warning that the impact of these changes could be far greater in the long run.

What the changes actually mean, is that from 21 April, the old A3 classification - covering restaurants, bars, pubs and take-aways - will be split into three different categories. The former A3 category will be reserved only for restaurants and caf‚s, while take-aways will become A5 and pubs and bars A4.

It's worth noting that while it will still be possible for A4 pubs and bars to move to A3 use (sit-down caf‚s and restaurants) without planning permission, restaurants will no longer be able to switch or extend usage to take-away or wet-led operations without the necessary paperwork from their local authority.

Superficially innocuous perhaps, but in reality, this will have major long-term repercussions for the hospitality industry, particularly for anyone buying or selling sites and those looking to change the main emphasis of their trade. It also throws up a whole host of questions which have yet to be answered by the Government.

"Supposing you were running an Indian restaurant and your primary function was sit-down trade with a bit of take-away on the side. Before, you would have been covered by A3 and that would have been that," explains Michael Fearn, planning director at St Albans planning consultant Shire Consulting. "But after 21 April, if your business changes so that take-away becomes the main focus, you will need permission to be A5.

"You might think you needn't bother your planning authority about the change, but if you don't, you could suddenly find yourself being hit by an enforcement notice asking you to cease trading."

Fearn also argues that you could now see a situation where two similar businesses, a Pizza Hut and a McDonald's, say, are trading out of identical units but one is classed A3 and the other A5.

The changes are also likely to impact on rent reviews and property values, with the perceived flexibility of an A5 site suddenly taking on new worth. Conversely, a tenant may be able to argue that if he no longer has the flexibility to extend his premises to take-away or bar operations, then it is less valuable and he should be paying less rent.

"The people most affected immediately will be anyone who has a unit that is in the hands of the solicitor or who is about to sign a deal," says Fearn.

The impetus for the changes has been largely political, according to Trevor Watson, director of agents at property agent Davis Coffer Lyons. The Government, he says, has long been keen to give planning authorities more control over town centres. In particular, ministers have wanted to see a clampdown on restaurants converting into large town-centre pubs, which are often blamed for contributing to late-night rowdiness and disorder.

Predictably perhaps, guidelines on transitional arrangements have yet to be published by the Government.

"No one has told us how existing consents are going to be dealt with," says Watson. "Will a restaurant that was previously A3 be able to argue that it can still operate as a pub, because it has had permission to do so in the past, for instance?"

Considering we're only some two months from the implementation of something that could, according to Watson, "have more impact than the Licensing Act", it seems remarkable that the Office of the Deputy Prime Minister has yet to shed light on the details of the changes.

When it does finally arrive, it might, for once, be a planning document well worth reading.

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