On 24 July, the Government announced a consultation on the proposed expansion of permitted developments rights so that hotels can be converted to C3 residential units without the need for planning permission. Whilst the government, in announcing the consultation, acknowledged the importance hotels and guest houses can play in supporting tourism it says that the local community might be better served if hotels are converted to offer additional residential space. 

The consultation asks for views on whether this is supported and whether any additional safeguards or measures should be introduced through a prior approval process before the change of use can take place. It gives, by way of an example, the local authority considering the impact the change of use could have on the local tourism economy.

The Government’s introduction of permitted development rights for initially offices, and then commercial units, to C3 residential units proved controversial and concerns were raising about the Government’s focus on housing delivery at the expense of commercial uses (which are often key for job creation and ensuring mixed and balanced communities). 

Many local authorities applied for Article 4 Directions to remove the permitted development rights, meaning planning permission would be required for such changes of use. However, the Government was very clear that they would not permit blanket Article 4 Directions and the Secretary of State intervened resulting in significantly reduced areas covered by the Article 4 Directions. 

We anticipate similar concerns being raised in response to this consultation. If the hotel to residential permitted development right is introduced we also anticipate a large number of local authorities in tourist locations will apply for Article 4 Directions. We query how easy it will be to objectively demonstrate the impact of the loss of the hotel use on local tourism if that becomes a requirement for prior approval.

That said, the hotels industry has struggled in recent years with the growth of AirBnb and other short term let providers and with the impact of COVID. Some owners and operators may welcome the ability to convert at least some of their existing floor-space to residential units to generate additional revenue.

The consultation runs until 25 September 2023.