Permitted development rights to support the provision of new homes: consultation

Annex A: Permitted Development Rights -Partial Business and Regulatory Impact Assessment – August 2025

Introduction

This partial Business and Regulatory Assessment (BRIA) considers the options set out in the associated consultation for amendment of existing permitted development rights (PDR), and the introduction of new PDR.

Executive summary

Issue and why it needs to be addressed

The Scottish Government is considering the potential to amend existing PDR, or introduce new PDR, mainly to assist in increasing the availability of housing in response to the Housing Emergency.

Intended outcomes

The options set out in the consultation and summarised below are intended to;

• Simplify and streamline planning processes in relation to development of residential accommodation.
• Facilitate and encourage the installation of domestic air source heat pumps (ASHPs) and the connection of buildings to heat networks.

Options under consideration

One or more of the following:

Option 1: Do nothing. No changes to current PDR.

Option 2: Amend existing PDR for the conversion of existing agricultural and forestry buildings to residential use (Class 18B and Class 22A respectively), to increase the use of the PDR.

Option 3: Introduce new PDR for the demolition of an existing agricultural or forestry building and the erection of a house, or houses, on the same footprint.

Option 4: Introduce new PDR for new-build homes more generally in particular types of ‘rural areas’ – either only where a building already exists on brownfield land, or also on greenfield land.

Option 5: Introduce new PDR for the change of use of the ground floor or entirety of buildings in town and city centres to residential use.

Option 6: Introduce new PDR for the change of use of upper floors above Use Class 1A (Shops and financial, professional and other services) to residential, with or without permitting any associated external alterations.

Option 7: Expand existing householder PDR (in relation to extensions and alterations to homes and/or domestic outbuildings).

Option 8: Revise existing PDR for the installation of domestic ASHPs.

Option 9: Introduce new PDR for the installation (and subsequent maintenance and repair) of underground connections from a heat network to domestic and non-domestic buildings.

Sectors affected

Individuals, businesses and landowners, members of the public and planning authorities.

Engagement completed, ongoing and planned

We have had early discussions with business, representative bodies and third parties which have informed the options set out for consultation. This partial BRIA is intended to be read in conjunction with the associated public consultation on PDR options.

Anticipated impacts (intended and unintended, positive and negative) and mitigating actions

Positive Impacts

• Options 2–9 would potentially reduce costs, administrative burdens and risk for developers by removing or simplifying requirements to submit details to planning authorities.
• Options 2–4 would promote new housing in rural areas, benefiting rural economies and landowners.
• By encouraging town centre living, options 5–6 would likely lead to increased footfall and vibrancy in town and city centres, supporting local businesses.
• Options 2, 5, 6, 8, and 9 would support climate and circular economy targets through reuse of buildings and easier installation of or connection to low-carbon technologies.
• Fewer planning applications would allow planning authorities to reallocate resources to more complex cases.

Negative Impacts

• Options 5 and 6 may have the effect of meaning that developers end up submitting both prior notification and planning applications for certain conversions, increasing costs and delays.
• Initial uncertainty around new PDR may lead to short-term costs for businesses in understanding and ensuring compliance with planning legislation.
• Options 5–6 may lead to displacement of small businesses from converted premises, especially those in Use Class 1A.
• Loss of ancillary space (e.g., storage, staff areas) due to upper floor conversions could impact operations.
• New residential developments near existing businesses (e.g., pubs, factories) may lead to complaints and costly mitigation requirements for those businesses.

Mitigating Actions

• Publish guidance on new/amended PDR to reduce confusion and compliance risks.
• The PDR for Options 5 and 6 could cover relevant external works to avoid dual application requirements.
• Set fees appropriately to avoid disproportionate financial burdens.
• Apply conditions and limitations to PDR to manage land use compatibility and protect existing businesses from adverse impacts.

Enforcement/ compliance

The procedures and powers for enforcing planning control are well established. There are no new procedures or enforcement powers required as a consequence of implementing any of the options.

Recommendations/ implementation plans

We will analyse and carefully consider the responses to the consultation. If Scottish Ministers proceed to make changes to or introduce new PDR this would be done by way of a SSI.

Evaluation and monitoring of implementation/ review of BRIA

A final BRIA will be published alongside any subsequent SSI, taking account of feedback received. This will include measures for monitoring the effectiveness of the measures.

Section 1: Background, aims and options

Background to policy issue

The Scottish Government is exploring whether permitted development rights (PDR) can play some role in helping to address the housing emergency

PDR are a form of planning permission granted through legislation, meaning that specified types of development can be carried out without the need for a planning application to be submitted and approved. PDR are contained in the Town and Country Planning (General Permitted Development) (Scotland) Order 1992 ("the GPDO"). They can provide greater certainty to prospective developers and save time and expense associated with applying for planning permission.

Our Programme for Government 2025-26 sets out that we will boost planning capacity and reduce barriers to delivery. Although this does not specifically refer to PDR, we are considering various options and PDR may have the potential to assist with this.

Our Planning and the Housing Emergency – Delivery Plan (November 2024) set out a series of actions to be taken to address the housing emergency. It included a commitment to consider and engage widely on the potential scope for further PDR which could support housing delivery in specific circumstances. We undertook early engagement with a range of stakeholders from November 2024 to March 2025. The feedback we received has helped to inform the development of options.

Purpose/ aim of action and desired effect

We consider that there are two main areas in which PDR could potentially help to support additional housing delivery: homes in rural areas, and support for town centre living.

We are also consulting on options for introducing new, or amending existing, PDR to avoid the need for planning applications for certain minor and uncontentious development. This would enable planning authorities to focus their efforts more on assessing and making decisions on planning applications, including those for new homes, more swiftly.

Options (considered so far/ still open)

The options being considered can be summarised as follows:

Option 1: Do nothing. No changes to current PDR. Unless development is permitted by existing PDR (or through a masterplan consent area scheme), an application for planning permission would continue to be required.

Option 2: Amend existing PDR for the conversion of existing agricultural and forestry buildings to residential use (Class 18B and Class 22A respectively). We are exploring various ways in which the existing PDR could be amended. These include:

• removing or increasing the current limits on the number and/or floor space of residential units that can be created;
• allowing an extension to the building;
• removing some of the current excluded locations where the PDR do not apply; and
• amending the prior notification and approval mechanism.

Option 3: Introduce new PDR for the demolition of an existing agricultural or forestry building and the erection of a house, or houses, on the same footprint.

Option 4: Introduce new PDR for new-build homes more generally in particular types of ‘rural areas’ – either only where a building already exists on brownfield land, or also on greenfield land.

Option 5: Introduce new PDR for the conversion of the ground floor or entirety of buildings in town and city centres to residential use.

Option 6: Introduce new PDR for the change of use of upper floors above Use Class 1A (Shops and financial, professional and other services) to residential, with or without permitting any associated external alterations.

Option 7: Expand existing householder PDR in relation to extensions and alterations to homes and/or domestic outbuildings.

Option 8: Revise existing PDR for the installation of domestic ASHPs.

Option 9: Introduce new PDR for the installation (and subsequent maintenance and repair) of underground connections from a heat network to domestic and non-domestic buildings.

Options 2 to 9 are not mutually exclusive; it would be possible to implement any number of them.

Sectors/ Groups affected

The measures involving new or extended PDR would, if taken forward, grant planning permission for specified forms of development. The effect is to allow relevant development to be carried out without a planning application needing to be submitted and. Key parties affected are:

• Individuals and businesses, who would be able to carry out development without preparing and submitting a planning application;
• Planning authorities, who would no longer have to handle and determine planning applications for relevant development types (although may need to consider prior notifications for certain developments); and
• Members of the public and businesses potentially affected by developments carried out under PDR (impacts, whether positive or negative, will depend on the nature of development).

Section 2: Engagement and information gathering

Engagement approach

We undertook early engagement with a range of stakeholders from November 2024 to March 2025. As part of this, we held a series of meetings, and invited written comments including through our Planning, Architecture and Regeneration e-alert service, X and LinkedIn pages. The feedback we received has helped to inform the development of the options summarised in this partial BRIA and set out in the consultation.

We are undertaking a public consultation on the options, which runs from the beginning of September to around the end of October 2025. During that time we will be continuing to engage with stakeholders.

Internal SG engagement/ engagement with wider Public Sector

Internal SG engagement

The emerging options have been informed by engagement with Scottish Government officials in other policy areas, including in the More Homes; Agriculture and Land Reform, and Heat in Buildings Policy and Regulation divisions.

UK/ Devolved Administrations

As planning is devolved, we have not engaged directly with officials in the UK Government or other devolved administrations with regard to the options. However we have considered the PDR for new homes in England and the impacts of those PDR.

Wider Public Sector

As part of our early engagement, we met and sought feedback from Heads of Planning Scotland and individual planning authorities, the Crofting Commission, the Scottish Land Commission, the Association of Local Authority Chief Housing Officers and Architecture & Design Scotland. We also obtained comments from Historic Environment Scotland and Scottish Environment Protection Agency.

International

The options are not considered to affect trade with Scotland and no international engagement has been undertaken.

Business / Third Sector engagement

As part of our early engagement, we met various stakeholders representing business and landowner interests. These included the Federation of Master Builders, Federation of Small Businesses, Homes for Scotland; Highlands and Islands Enterprise; Community Land Scotland; Scottish Land and Estates, and individual housebuilders and architects/planning agents. We received comments from others including the Royal Incorporation of Architects in Scotland and the Scottish Property Federation.

In terms of engagement with the third sector, we obtained comments from the Royal Town Planning Institute, met the Town and Country Planning Association; and Scottish Futures Trust, amongst others.

Public consultation

We are undertaking a public consultation on the options. All of the options summarised in this partial BRIA are covered in the consultation. During the consultation period we will be continuing to engage with stakeholders and widely publicising the consultation.

Other stakeholders

We will continue to identify any other relevant stakeholders, and this will be informed by responses to the consultation.

Section 3: Costs, impacts and benefits

Quantified costs to businesses

Option 1 (Do Nothing) would result in no change to the costs incurred by businesses in proposing and proceeding with developments.

The potential changes to extend or introduce new PDR would likely result in cost savings for prospective developers, who would no longer have to pay to prepare and submit applications for planning permission for the developments covered by the PDR.

In relation to Options 2 to 6, prospective developers might incur costs to prepare and submit a prior notification and/or application for prior approval. It is likely that those costs would be lower than those associated with preparing and submitting a planning application for the development.

In relation to Option 6, there is the potential that a developer would still need to submit a planning application for certain external works associated with a conversion, if those works are not covered by the PDR. That planning application would incur a fee. The net result could be that the developer incurs greater cost (in money and time) because they need to submit both a prior notification and a planning application. This risk could be mitigated through careful consideration of what the PDR should cover, and how the associated fee(s) should be set.

The overall extent of savings to business from extended or new PDR would ultimately depend on how many developments come forward under PDR that would previously have been subject to a planning application. This is difficult to predict, not least because planning application data held centrally is not broken down with sufficient ‘granularity’ to indicate how many applications there have previously been for the types of development for which PDR measures are being considered.

Other impacts

Benefits to businesses are discussed in sections above and below.

Initially, savings arising from changes to PDR might be partially offset by some costs to business in ascertaining whether development proposals are covered by the new/revised PDR. In addition, businesses may incur costs to comply with planning enforcement and/or submit a planning application if any development is carried out which subsequently transpires not to benefit from PDR. However, such costs are anticipated to be relatively small and short-term, reducing as parties become more familiar with the PDR. These risks could be reduced through the publication of clear guidance on the new/amended PDR.

Scottish firms’ international competitiveness

No negative impacts on the international competitiveness of Scottish firms are anticipated. However given the PDR would relate to relatively small-scale developments, it is not considered the options would have any significant beneficial impact on the international competitiveness of Scottish firms.

Benefits to business

In addition to the financial cost savings outlined above, Options 2 to 9 would also likely result in time savings for businesses, where they are proposing a development which no longer requires a planning application.

By helping to promote and facilitate the small-scale development of new homes (in the case of Options 2 to 6) and the installation of ASHPs (Option 8), the measures would potentially result in more such developments taking place. This would have knock-on benefits for business including small businesses involved in the construction and ASHP industries, and associated skilled trades such as painters, plasterers, electricians etc.

By helping to encourage and facilitate the development of new homes in rural areas, Options 2 to 4 would potentially benefit rural businesses. The residents of those new homes might support and/or work in nearby rural businesses. In addition, the development of new homes on farms, forestry or other rural land and the subsequent sale or rental of those homes would be a source of income for the business or individual that owned the land.

Options 5 and 6 would likely bring indirect benefits to businesses within town and city centres by encouraging town centre living. Residents living in town and city centres are more likely to visit local shops, food and drink outlets and other services, increasing footfall in those centres. This would help to support businesses, particularly those that rely on spontaneous or repeat visits. Increased town centre living might also make town and city centres feel safer and more vibrant during the day, evening and night, which in turn would help support businesses, for example those in the hospitality sector.

If businesses own the upper floors above Use Class 1A premises, Options 5 and 6 would likely make it easier and quicker for them to create new homes on those floors for subsequent sale or rent.

By removing development proposals from the planning application process, the measures under consideration would also likely reduce administrative burdens on planning authorities – allowing them to focus resources elsewhere, including the determination of planning applications. This would be particularly the case if the PDR has either no or minimal requirements for prior notification and/or prior approval. Options 7 to 9 are unlikely to involve any prior notification/approval mechanism.

Small business impacts

The potential benefits outlined in the above section are likely to apply to businesses of all sizes including small businesses, if those businesses own buildings eligible for the PDR or are involved in construction or skilled trades industries.

By making it easier and faster to convert Use Class 1A premises to residential, Option 5 might result in small businesses within Use Class 1A (shops and financial, professional and other services) being forced to close or move out of ground floor units or the entire building. This is particularly the case if the owner of the building considers that creating, and subsequently selling or letting, one or more homes on the ground floor or entire building would be more profitable than continuing to let it to the small business in question.

Option 6 might similarly result in such adverse effects on small businesses, albeit limited to upper floors of a building. A landlord might choose to convert the upper floor to residential under the PDR set out in Option 6, and this might in turn reduce the floorspace available for a small business that operates a shop on the ground floor and use the upper floor as associated storage, ‘back office’ or staff welfare space.

By promoting the creation of new homes which might otherwise have not been created in the absence of PDR, Options 2 to 6 might result in adverse impacts on existing nearby businesses in terms of incompatibility of uses. For example, new homes might be created close to an existing public house, night club, music venue, or factory. If subsequently there are noise complaints from residents of the new homes, those complaints would be investigated by environmental health officers and the existing business might have to spend significant amounts of money on noise insulation, reduce its hours of operation/activity, or in the worst case cease operating. This risk could potentially be mitigated through conditions or limitations on the PDR.

Small businesses may be less likely to have the in-house expertise, or afford to buy the relevant professional advice, on the technicalities of PDR. They may therefore be less likely, than larger businesses, to have a good understanding of what they are and are not permitted to do under PDR. In turn, they might be less likely to make use of the PDR. Or they might be more likely to undertake work which transpires to be not covered by the PDR and therefore liable to enforcement action. These risks could be reduced through the publication of clear guidance and widespread publicity on the new or amended PDR.

Investment

All of the options (except Option 1 – do nothing) would likely make Scotland a more attractive place in which to invest, as a result of the cost savings and benefits to business discussed above. However, the effect through individual developments is likely to be minor.

Workforce and Fair Work

No impacts on the workforce and fair work are anticipated from any of the options.

Climate change/ Circular Economy

Option 1 would not have any impact on businesses’ ability to contribute towards climate and circular economy targets.

Options 2, 5 and 6 would likely improve businesses’ ability to contribute towards those targets, by making it simpler and quicker to obtain approval to convert existing buildings (or parts of buildings) to homes. The reuse and retrofit of existing buildings for new homes is generally more sustainable and less carbon intensive than new-build homes.

Option 7 is assessed to have an insignificant impact in relation to this topic.

Option 8 would improve the ability of businesses (particularly those in the heating/domestic renewables industry) to contribute towards climate targets, by making it more straightforward to install domestic ASHPs.

Option 9 would improve the ability of businesses to contribute towards climate targets as they would generally be able to connect to heat networks that use low or zero carbon generating technologies without needing to prepare and submit a planning application and pay the associated application fee.

Competition Assessment

None of the options set out above would have any negative impact on suppliers’ abilities to compete, or restrict any ability to compete. Options 2-9 would potentially increase opportunities for suppliers by reducing the need for planning applications and increasing consumer confidence to propose and undertake development. By reducing the uncertainty and cost associated with planning applications, options 2-9 could increase consumer choice and opportunities to engage with housing and renewable/low carbon heating markets.

Consumer Duty

The consumer duty is a legal duty to consider the impact strategic decisions have on consumers. Consumers, and organisations with an interest in improving outcomes for consumers, can therefore use the duty to hold public bodies to account and help to ensure consumer interests are given sufficient weight throughout the strategic decision making process. The definition of a consumer is an individual or small business who buys, uses or receives goods or services in Scotland, or could potentially do so, supplied by a public authority or other public body.

Previous sections of this partial BRIA discuss potential impacts of the various options on consumers, which are primarily beneficial impacts.

Feedback received at this consultation stage, and our early engagement with business interest groups and others, will inform our assessment of the options.

Section 4: Additional implementation considerations

Enforcement/ compliance

Compliance with planning control is the responsibility of any person carrying out development. Responsibility for enforcement of planning control rests with the planning authority in whose area the development takes place.

There are well-established powers for planning authorities to ensure compliance with planning control. Any enforcement action would be taken in line with standard policies and practice.

UK, EU and International Regulatory Alignment and Obligations

Internal Market/ Intra-UK Trade

None of the options under consideration would result in significant policy or regulatory divergence within the UK. In England there are initiatives, including PDR similar to but wider than options 2 and 6, for conversion of existing properties to residential use. In relation to option 8, the UK Government has already made amendments to PDR for ASHPs in England in the light of changes to relevant industry standards.

The options would not result in significant divergence from the overall policies and regulatory intentions of the other administrations.

International Trade Implications

There are no expected implications for international trade.

EU Alignment consideration

There are no identified issues that would have an impact on EU alignment.

Legal Aid

We consider that there would be no implications or additional requirements on individuals right to access to justice or legal aid.

Digital impact

No concerns in relation to digital arise from any of the options. Any information required for prior notification can be submitted through existing online portals or in more traditional formats; how the information is submitted has no bearing on any consideration of individual cases.

Business forms

Options 2 to 6 may entail the creation of new or revised forms related to the prior notification to, or application for prior approval from, planning authorities. However, the forms themselves would not be overly complex and could be trialled, and improved following feedback from stakeholders including business.

Section 5: Next steps and implementation

Recommendations/ preferred options

The Scottish Government is consulting on the options outlined above and recommendations will be added in due course, following consideration of responses to the consultation.

Implementation considerations/ plan

After the consultation period ends, all responses and feedback received will be analysed and carefully considered. If Scottish Ministers proceed to make changes to or introduce new PDR this would be done by way of a Scottish Statutory Instrument (SSI). Specifically, an order amending the Town and Country Planning (General Permitted Development) (Scotland) Order 1992. The SSI would be laid before the Scottish Parliament for consideration.

Post implementation review

We will set out measures for monitoring the effectiveness of proposals following the consultation and finalisation of proposals to take forward.

Declaration

I have read the Business and Regulatory Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact has been assessed with the support of businesses in Scotland.

I am also satisfied that officials have considered the impact on consumers as required by the Consumer Scotland Act 2020 in completion of the Consumer Duty section of this BRIA.

Ivan McKee

Minister for Public Finance

Scottish Government Contact point: Development Management team, Planning, Architecture and Regeneration Directorate: developmentmanagement@gov.scot