Business Clinic: Do planning changes affect barn conversion?

Whether it’s a legal, tax, insurance, management or land issue, Farmers Weekly’s Business Clinic experts can help.

Here Nicola Quick, associate partner, Carter Jonas Rural, advises on planning and use considerations for a proposed barn conversion.

See also: Business Clinic – what should my grazing agreement include?

Q I had intended to apply for planning permission to convert a disused barn to two small cottages under Class Q permitted development rights (PDRs), thinking that I could then decide whether they would be let long term under assured shorthold tenancies (ASTs) or as short-term holiday lets. I’ve just heard from a neighbour that the rules may have changed or may be changing, and I will now need to decide on one or the other. Is this true? Can I get in quickly before the rules change? Do you have any advice on which one is better?

A Your neighbour is referring to some changes announced by the government to take effect from this summer (at the time of writing, there was no more detail on the date than that) relating to short-term residential lets.

However, the recent general election announcement means that it is not clear whether the proposed changes will be implemented by a new government.    

If the changes go ahead, the first part of these is to introduce a new planning use class for dwellings that are used for short-term lets (let for more than 90 nights a year) and are not used as a sole or main home.

This will have the effect of separating short-term residential (holiday) lets from standard residential dwellings when it comes to planning. Each dwelling will be permitted to be used for one or the other.

As mentioned, we don’t know exactly when the change will take place, but it won’t be possible to get a new planning application in quickly to avoid being caught by the new rules.

Existing dwellings will be automatically classified under the new use class if they are used as a dedicated short-term (that is, holiday) let, although at present we don’t know the date that will be used for the classification, and it’s possible that it could be historic.

However, there are also two new PDRs announced, which effectively give property owners the right to change a property from a short-term let to a standard residential dwelling, and vice versa.

While this could be seen as retaining the flexibility that we are used to, it does mean that you would need to make an application to change the use.

Usually this will be through prior approval but, as with other PDRs, local planning authorities have the powers to issue an Article 4 direction removing such a right, so requiring full planning permission for such a change.

Current Class Q PDRs allow agricultural buildings to become C3 use (dwellinghouse), so rather than “choosing” as part of the application, it looks like you’ll convert to residential using PDRs, and another subsequent application will be required to convert to short-term lets.

Choice of uses

Your question on which is better is trickier to answer as there are so many variables.

Naturally, a major part of your decision-making process should be considering the market demand for each property type and how much of your time (or someone else’s paid time) you’re willing to put into running the properties.

You should also consider – probably seeking professional advice, as there is a big investment required here – the impact on the capital value of the asset, business rates, and the tax implications.

It’s worth nothing that the final part of the government’s announcement was a mandatory national register of short-term lets, to understand the extent of these lets in each council area and to assist with monitoring of compliance with health and safety regulations.

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