High street rental auctions and the planning side

A high street rental auction lets a local authority in England put a long vacant shop out to auction and grant a tenancy over the landlord's head, and the planning side was dealt with by giving the resulting use a permitted development right rather than making anyone apply. The powers sit in Part 10 of the Levelling-up and Regeneration Act 2023 and were brought into operation by regulations that took effect on 2 December 2024, which also inserted a new Class DB into Part 4 of Schedule 2 to the General Permitted Development Order 2015.

For a business taking a unit this way, the useful point is narrow and important. The change of use is covered. The works usually are not.

What the power lets an authority do

The authority identifies premises it considers suitable for a high street use that have been vacant long enough to qualify, serves an initial letting notice on the landlord, and if the position does not change, serves a final letting notice. It can then run a rental auction and grant a tenancy to the successful bidder.

The tenancy is short and prescribed. The regulations set the term at between one and five years, exclude it from the security of tenure provisions of the Landlord and Tenant Act 1954, and fix other terms including a rent free period at the start.

The auction period itself is 12 weeks, running from the first day on which the statutory conditions for the premises are satisfied. That is a tight programme for everyone involved.

Qualifying premises and vacancy conditions

Three conditions have to line up. The premises must be on a designated high street or in a designated town centre as identified by the authority. The authority must consider them suitable for a high street use. And they must have been vacant for more than a year, or for at least 366 days within the preceding two years.

The vacancy test is the one that generates argument, because occupation for a short period inside the two year window can defeat it, and the evidence of occupation is often thin on both sides.

The notice sequence before an auction

The sequence matters because each notice starts a clock and opens a window for the landlord to respond.

1. The authority serves an initial letting notice, which restricts the landlord's ability to let the premises without consent during its currency.
2. The landlord may serve a counter-notice and, on prescribed grounds, pursue the appeal route the Act provides. Check Part 10 of the Act for the forum and the grounds, because they are narrow and the time limits are short.
3. If the premises remain vacant and no ground succeeds, the authority serves a final letting notice.
4. The authority runs the rental auction within the auction period.
5. A tenancy on the prescribed terms is granted to the successful bidder.

Landlords who intend to redevelop or to occupy themselves need to move early rather than wait. A counter-notice served late is worth nothing.

Use classes and the works permitted

Class DB permits a change of use of qualifying high street premises, and land within their curtilage, to a suitable high street use for the duration of a tenancy granted following a rental auction. It is a temporary right: at the end of the tenancy the premises revert to their previous lawful use.

Two exclusions apply on the face of the Class, for premises forming part of a military explosives storage area or a safety hazard area. And the right is conditional on the authority notifying the local planning authority of the suitable high street use, the date the use will start and the date it will cease.

What Class DB does not do is authorise building works. So a new shopfront, an extraction duct up the rear elevation, external plant, an air conditioning condenser, a roller shutter or a change to the means of access will each need to be assessed on its own, and many of them will need planning permission.

For a food business that is the decisive issue. A unit that was last used as a shop will have no kitchen extraction, and installing a flue up the rear wall is development. Expect to need a Ventilation and Extraction Statement and, where plant will run near residential windows, a Noise Impact Assessment following the relevant British Standard for industrial and commercial sound.

Planning permission deemed or required

It helps to separate the three layers.

The use is covered by Class DB for the life of the tenancy, provided the conditions are met and the exclusions do not bite. External works are not covered and need their own permission unless another right applies. Advertisement consent for signage, listed building consent on a listed building, and consent under an Article 4 direction all sit outside Class DB entirely.

Then there is everything that is not planning at all: Building Regulations approval for the fit out, a premises licence for alcohol or late hours, food registration, and the landlord's own consents under the tenancy.

A tenant who assumes the auction has cleared all of that will lose the first three months of a five year term to paperwork.

Landlord objections and the grounds

Landlords have resisted the powers on the basis that a tenancy imposed at auction interferes with their ability to manage an asset, and that the vacancy test does not distinguish between neglect and a genuine redevelopment programme.

The Act's answer is the counter-notice and appeal structure, with grounds that focus on intended works, intended occupation and other prescribed circumstances. The practical advice to a landlord is unglamorous: keep dated evidence of marketing, of any occupation, and of any redevelopment intention, including professional appointments and application dates.

The practical advice to a prospective tenant is the mirror image. Ask the authority for the notice history and the designation evidence before bidding, because a successful challenge by the landlord unwinds the arrangement you were planning around.

Status of the regulations and guidance

The position set out here is as at publication: the powers are in force in England, the procedural regulations took effect on 2 December 2024, and Class DB sits in Part 4 of Schedule 2 to the 2015 Order. Scotland, Wales and Northern Ireland have their own planning frameworks and these powers do not extend to them.

Check the consolidated text of the Order and the current government guidance before relying on any of it, because this is a young regime and the practice around it is still settling. Reform in this area has a habit of arriving in stages, as the position on plan making reform and emerging plans shows, and updates are worth following through the UK planning law updates timeline.

If you are fitting out a unit taken through an auction and need to work out which documents the council will expect for the external works, browse all 66 PlanScope report types.

This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.