Class ZA: Good news regarding residential development of old buildings

The COVID-driven increase in demand for residential properties with a rural setting and gardens, and the ability to work from home is good news for landowners.

It has been announced with effect from the end of August 2020 that detached commercial buildings can potentially be demolished and replaced with a dwelling. This is the introduction of use Class ZA.

It is not all “plain sailing“, however. In addition to the normal planning hoops the landowner must also comply with requirements on age and area.

Use Class ZA is looking to target old commercial buildings constructed before 31st December 1989.

The area of the old building must:

• not exceed 1000 m²;
• not be of a height greater than 18m above ground level;
• not have been occupied for at least six months immediately before the application for prior approval under ZA;
• the new building footprint must be within the footprint of the old building;
• and the new building height must not exceed the lower of 7m above the height of the old building or 18m in total.

The planning application will be what is called a “prior approval” application, and will need to cover flooding, transport, and highway impacts. Plus contamination, external appearance, design of new building, impacts on amenity, impacts on heritage, and include landscaping plans, method of demolition, and also the effect on local businesses and new residents.

For example, if you have a building on a farm that has been rented out on commercial terms, being the equivalent to a class B1 use, then that would qualify for Class ZA conversion to residential. So an apple store, potato store or a grain store would qualify where those stores are used by third parties and let out as such and not used by the landowner. But it will not apply to stables, as that is not a B1 use.

It would apply to buildings used by a landowner within the landowner’s own business where the landowner is using those for B1 use if those are acceptable to convert.

Other examples where it would apply would include large buildings used for storage of furniture or similar non-agricultural uses; buildings used for the storage of fertiliser; or buildings used in connection with a shoot where the shoot is run separate to the farm.

This new use Class ZA will also impact on how farms are valued moving forward, for example on the death of a landowner. This highlights a further need for farmers to get good inheritance tax advice, to ensure that buildings not used within their own agricultural production are definitely put into their business if they are let out, so as to ensure that they get on the starting blocks for the landowner’s family to claim business property relief against the 40% charge of inheritance tax.

For further details and individual advice on Class ZA, please contact either Amy Richardson or Jeanette Dennis in Ashtons’ agriculture and estates team.

Jeanette can assist with farming families’ succession planning and business continuity issues, and inheritance planning for the farming family.

Amy specialises on the planning side and has already advised landowners on apple stores that qualify for use class ZA. As well as being a planning expert of over 20 years’ experience, Amy is also part of the agricultural community and represents several leading equestrian enterprises and training yards in and around Newmarket.