Being granted outline or full planning permission can result in progress towards developing a commercial site, but the onward process is very different depending on the type of application made. This guide explains the difference between outline and full planning permission, the advantages of pursuing either route, and how to decide which approach is right for your commercial development.
Commercial Planning Permission Basics
Planning permission is required for most forms of commercial development, including common projects like new buildings, redevelopment of inner-city sites, changes of use or development of land.
The UK planning system applies the same framework to all development. Because commercial schemes are generally larger, more complex and have longer delivery times it’s important that planning is approached strategically, with the aim of maximising the resulting quality and value of a development.
The UK planning system makes decisions based on a mixture of national and local policy. Mainly because of scale, current national policy usually has more relevance to commercial development than smaller homeowner projects. National policy is set out in the National Planning Policy Framework, alongside locally adopted development plans that shape what is acceptable in each area. Understanding how these frameworks interact in a given area is important when assessing the commercial feasibility of developing a particular site.
Understanding Outline vs. Full Planning Permission
What Is Outline Planning Permission?
Outline planning permission establishes the principle of development on a site without fixing all design details. It confirms that a Local Planning Authority (LPA) accepts the proposed use and scale of development in principle.
Detailed matters such as layout, appearance, scale, access and landscaping are, often, reserved for later approval through one or more “reserved matters” applications. Development cannot lawfully begin until all required reserved matters are approved.
Outline permission is commonly used on development land and larger commercial sites, particularly where flexibility or phased delivery is required. It is also a route developers may choose when seeking to prove the viability of a development opportunity and correspondingly increase the value of the site.
What Is Full Planning Permission?
Full planning permission approves a complete and detailed scheme. All key design elements are fixed at the application stage and, once pre-commencement conditions are discharged, development can commence without further design approvals.
This route provides the greatest level of certainty, but also the least flexibility if changes are needed later.
How Do Commencement Deadlines Differ?
Full and outline applications have different implementation deadlines. Our guide to How Long Does Planning Permission Last for Commercial Developments explains how time limits apply to both outline and full planning permission grants.
Pros and Cons of Obtaining Outline Planning Permission
There are some considerable advantages to obtaining outline planning permission. From a commercial perspective, outline permission can reduce early planning risk by establishing acceptability before detailed design and technical work is undertaken. This mitigates the risk involved in sinking a considerable amount of money into a scheme where the viability of development isn’t proven.
As mentioned above, outline planning permission can also raise the value of land considerably, whilst costing less to prepare (at least for the initial application) than a full planning application. Although old data, Parliamentary research conducted in 2018 showed that outline planning permission for residential use could raise the value of agricultural land from £21,000 per hectare to £1.95m per hectare, a 9000% increase.
However, there are also disadvantages versus a full application. Outline planning permission grants introduce additional stages and time limits. Reserved matters applications must be prepared, submitted and approved before development can start. Because of these extra stages, the total cost of planning across the whole development lifecycle is likely to be larger than for a full application. Finally, when the list of reserved matters applications that must be successfully submitted is long and contingent, expiry risk for the original outline planning permission may arise and need to be managed.
Because of these disadvantages outline planning permission is usually best suited to larger schemes where the principle of development itself is uncertain and risk needs to be managed, flexibility is required or long-term/phased delivery is needed.
Benefits of Full Planning Permission
Being granted full planning permission gives you as the commercial developer a high level of certainty that development can take place, as well as a clear set of designs for modelling eventual return on investment. Once full planning permission is granted and pre-commencement conditions are discharged, development can proceed without further design approvals.
This certainty can support financing and valuation requirements, particularly where third parties require clarity on what will be built. Full planning permission is often preferred when the principle of development is very likely in favour (or certain), or where the development itself is shovel ready.
Although this isn’t always the case, the rise in value of land with full planning permission attached can be higher than land with outline planning permission attached.
The main disadvantages versus an outline application are higher initial cost and reduced flexibility. A full planning application is typically more expensive at initial application due to detailed design, technical work and a greater variety of reports being required. Flexibility is lower because material changes to an approved scheme may require further applications, such as a Section 73 variation or a fresh planning application.
Although targeted at homeowners, our guide on changing planning permission explains how changes are managed in practice and is relevant for commercial development.
How to Decide Which Option Is Right for Your Development
Given the advantages and disadvantages of either option, the choice between outline and full planning permission usually comes down to the characteristics of the site and local requirements. Key factors to consider include:
- Whether the principle of development itself is uncertain. If the application is speculative or has a high likelihood of refusal on principle, then an outline application may be a better route.
- The need for future flexibility. If material details are likely to change then an outline application can preserve flexibility for a commercial developer.
- Financing and third-party requirements. Financing may be contingent on either type of application being successful.
- Whether the goal is to develop the site or achieve a maximum increase in land value for onward sale. Depending on the characteristics of the site, a successful full or outline application may offer better or more immediate commercial returns.
How a Planning Consultant Can Help
Working as an integral member of your team, a planning consultant can assess site constraints, policy context and commercial objectives to design and deliver the most appropriate planning strategy. They can also manage the process from application through to reserved matters, condition discharge and lawful commencement.
At Holland Lloyd, we have extensive experience of working with commercial developers on sites of all types and scales, from large high-profile developments to smaller rural schemes. Our commercial planning service assists developers with outline, reserved matters or full applications. We have extensive experience of varying consents, amending approvals and providing appraisals that can help unlock significant ultimate value. Whether you are working on an early scheme to develop land, in the process of preparing a commercial scheme or managing an existing consent, our advice service is here to help you meet your commercial objectives. Contact us today for more information.
FAQs
What is the difference between outline and full planning permission?
Outline permission establishes the principle of development, with details approved later. Full permission approves all details upfront.
Is outline planning permission suitable for commercial development?
Outline planning permission is commonly used for development land and larger commercial schemes where flexibility or phased delivery is required. It is less common to apply for outline permission for smaller or homeowner projects.
Does outline planning permission add value to land?
Successful outline permission often increases land value, with historical parliamentary research showing that uplifts on agricultural land can exceed 9000%.
Can I switch from outline to full planning permission?
Switching is unusual because reserved matters applications convert an outline approval into a deliverable scheme. A fresh outline or full application may be required if the parameters of the original outline application are no longer relevant.