C3 or not C3? Planning use classes for retirement housing

18th November 2016

An ageing population means that there is more of a need than ever for retirement housing to be delivered.  This is, however, easier said than done, with a lack of understanding in local authorities about retirement accommodation often causing issues when seeking planning permission.

A particular problem in the planning process relates to the ambiguity over the appropriate use class for different types of housing. The debate over whether retirement housing falls within a C2 or C3 use Class is still causing delays, or in some cases, preventing schemes coming forward altogether.

The issue centres around whether retirement housing falls within the definition of a normal ‘dwelling house’, which is a C3 planning use, or whether it falls within the definition of a C2 planning use, namely that it is a ‘residential institution’ where care is provided to residents.

There is little dispute that a traditional residential care home where residents benefit from meals and other facilities being provided communally would fall within a C2 use.  Extra Care Housing, however, where residents have self-contained accommodation, but which is combined with communal facilities and the availability of personal care, is not as clear cut.

The advantage of a scheme falling within a C2 use class should not be underestimated.  Whilst local authorities have rigid planning policies setting out appropriate locations for housing development, C2 schemes are not necessarily bound by these planning policy constraints. Planning permission is increasingly being granted for C2 retirement housing on sites where market housing would not be permitted, including town centre sites and in protected countryside, such as Areas of Outstanding Natural Beauty.

Additionally, as more and more local authorities introduce Community Infrastructure Levy, they are imposing a fixed charge per square metre of floor space for C3 development. This can be up to £500 per square metre in some areas for C3, but there is usually a zero charge for all C2 development.

The value of a development falling within a C2 use class instead of C3, for the financial viability of a scheme, has led to this argument being considered by thecourts in a number of cases. Of particular interest was the Leelamb Homes v Maldon District Council case, which ruled that a minimum care package of two hours per week was sufficient for a scheme to be C2.

As a result, it is increasingly common to see local authorities permit a scheme on the basis that it is C2 use class if a minimum care package of two hours per week is secured in a Section 106 obligation prior to planning permission being granted.

National planning policy has also changed to support the delivery of retirement housing. From March 2015 local authorities became required to use population projections to assess housing need by age group, and use this information to meet housing need.

These statistics have certainly given authorities food for thought: the current population projections predict that in 30 years’ time over-65s will make up more than 25 per cent of the populations in the vast majority of local authorities, and up to 40 per cent in some seaside areas.

The true impact of these changes to planning policy remains to be seen, but it looks hopeful that these changes, together with the possibility of securing a C2 use with a minimal care commitment, will give the sector more flexibility to deliver innovative and profitable schemes.