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27 October 2020 | Childcare & Education

Use Classes Order Changes & the impact on child centric sectors

Since 1987, the Use Classes Order in England has been the primary legislative tool to control changes of use within property.

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The UK government announced changes to the Use Classes Order which came into effect on 1 September. These changes impact a multitude of business property types, including childcare and education settings, and work to provide greater flexibility to repurpose property uses.

We’re over a month into the changes already, and it’s interesting to see emergence of the scope that these changes could bring and the far-reaching impact that could possibly have on the UK childcare and education sector, and on day nurseries, in particular.

Prior to 1 September, the D1 use class was very restrictive and presented challenges for those seeking to organically develop new day nursery facilities, it could often be a long, costly and often time-consuming process.  But, as a result of these changes, it has become significantly easier to convert a wider variety of properties into day nursery usage and the pool of properties available for conversion is increasing.

Nursery owners wanting to expand and grow their business may have previously had difficulty finding properties with the benefit of existing D1 planning consent. But recent changes to the UCO mean that there is now far greater flexibility around the range of potential buildings that nursery operators or developers could convert and expand into.

The changes mean that it’s also easier for buildings that accommodate nurseries to be converted into alternative business use. During the past few years, as a result of funding issues which have, in some cases, created sustainability challenges, we have seen some day nurseries cease trading.  Owners of freehold nursery premises are now awarded wider alternative use prospects in the event of closure, permitting properties that previously traded as nurseries to be occupied by a wide range of alternative occupiers such as a retail premises, medical or health service, restaurant or café, should the property appeal to buyers for such a use, due to suitability of asset and location.

As with any policy changes, there are of course some challenges presented here. We have witnessed growing concern from some operators that it may now be too easy for properties to be converted into day nurseries, which consequently could increase competition and threaten other independent settings nearby.

Over the course of recent weeks, Christie & Co has witnessed an increase in enquiries from property owners – including freeholders of restaurant premises, some of which have been severely hit the coronavirus pandemic - exploring the opportunity of converting their premises into day nursery provision. Where previously the use classes were highly restrictive, a far wider range of options are now available to property owners when considering opportunities for business expansion, and indeed options when considering the freehold sale of a nursery in the event of the property being sold with vacant possession.

Do you feel that these changes will have a positive or negative impact on the nursery sector in England? Let us know by completing this short survey