Industrial use classes: B2, B8 and E(g) explained

A use class is the planning category that defines what a building may lawfully be used for. In England, every industrial unit, warehouse and yard sits somewhere in the Town and Country Planning (Use Classes) Order 1987, as amended in 2020, and the letters that follow a unit through its life, B2, B8, E(g), sui generis, decide which occupiers can move in without a planning application, what the unit is worth, and how lenders will treat it as security. For something so consequential, use classes are widely misunderstood, not least because the 2020 reforms retired the old B1 class that much of the market still talks about.

This guide explains the industrial use classes as they now stand in England: B2 general industrial, B8 storage and distribution, the E(g) business uses including light industrial, the sui generis uses that sit outside every class, the changes you can make without permission, how a change of use application works, why use class matters so much to lenders and valuers, and how to check a unit's lawful use before you commit. Scotland and Wales run their own versions of the system with material differences, so check the right regime for the property. We arrange finance on industrial property as a broker and introducer, not a lender, and nothing here is legal or planning advice: for anything that matters, take advice from a planning consultant.

What use class is industrial property?

Industrial property in England falls across three homes in the Use Classes Order. General industrial processes sit in class B2. Storage and distribution sits in class B8. Light industrial use, alongside offices and research and development, sits in class E(g), part of the broad commercial, business and service class E created in September 2020. A fourth category, sui generis, meaning of its own kind, catches uses deliberately excluded from every class, and several common industrial-adjacent uses live there, including most open storage of the kind covered in our guide at /property-types/open-storage-yards/.

The 2020 reform is the source of most current confusion. Before September 2020, business uses occupied class B1, split into B1(a) offices, B1(b) research and development and B1(c) light industrial. The 2020 amendments abolished B1 entirely and moved its contents into class E as E(g)(i), E(g)(ii) and E(g)(iii) respectively. Older leases, valuations and sale particulars still refer to B1 constantly, and reading B1(c) as E(g)(iii) is now part of basic document literacy in this market.

Why the structure matters: planning permission is needed for a material change of use, and moving between use classes is generally material unless legislation says otherwise, while moving within a class is not development at all. So a unit's class defines its pool of lawful occupiers, and through them its rental market and value. Two physically identical units, one with B8 consent and one restricted to E(g)(iii), can have meaningfully different tenant pools and prices.

The industrial use classes in England as they stand after the September 2020 reform

Use class	What it covers	Former label	Typical occupiers
B2	General industrial processes with externalities	B2 (unchanged)	Fabrication, foundries, body shops, heavy engineering
B8	Storage and distribution, including open air storage	B8 (unchanged)	Warehouses, parcel hubs, trade distribution, yards
E(g)(iii)	Light industrial passing the residential amenity test	B1(c)	Electronics assembly, precision engineering, makers
E(g)(i) and E(g)(ii)	Offices, research and development	B1(a) and B1(b)	Admin functions, R and D within class E
Sui generis	Uses outside every class	No class	Scrapyards, vehicle sales, waste, much open storage

What is use class B2 general industrial?

Class B2 covers general industrial use: the carrying on of an industrial process other than one that falls within the light industrial definition in class E(g)(iii). In practice B2 is manufacturing with externalities, the processes involving noise, vibration, fumes, dust or smell that could not sit next to housing without harm. Fabrication shops, foundries, vehicle body shops with spraying, food processing at scale and heavy engineering are classic B2 occupiers.

B2 consent is valuable precisely because it is hard to recreate. Councils protect existing general industrial land through local plan policies because, once lost to other uses, sites that can absorb noisy, dirty processes are nearly impossible to re-establish near the labour and customers they need. For an investor, a unit with established B2 use in a constrained urban area carries a scarcity premium with the right occupier, even though B2 space often looks identical to B8 space from the road.

The boundary with light industrial is functional, not physical. The test for E(g)(iii) is whether the process can be carried out in a residential area without detriment to its amenity; a process that fails that test is B2. The same building can host either, and the same business can drift from one to the other as it grows or changes kit, which is one of several reasons the lawful use of a unit is a question of evidence and history rather than of what the building looks like today.

What is use class B8 storage and distribution?

Class B8 covers use for storage or as a distribution centre, and since 2020 it expressly includes open air storage. It is the use class of the modern logistics economy: warehouses, parcel hubs, trade and wholesale distribution, fulfilment operations and yards holding goods, vehicles or materials. If the dominant activity in a building is goods at rest and goods in motion rather than goods being made, the use is B8.

B8 is currently the most demanded industrial consent in many markets because distribution occupiers, from national parcel networks down to a local tradesman storing materials, compete for the same well-located stock. The dividing lines still need care. A trade counter, where goods are stored and sold mainly to trade customers, usually operates as B8 with an ancillary sales element, but if retail sales to the general public become dominant the use can tip into a different category, and many trade units carry planning conditions controlling exactly this.

The edges of B8 generate a surprising amount of planning case law: at what point a yard storing vehicles becomes a sui generis vehicle business, whether a fulfilment operation with heavy processing is partly B2, how much ancillary office space a distribution unit can carry. The practical lesson for buyers and borrowers is that B8 on a marketing brochure is a claim, not a fact, and the evidence for it should be checked the way the final section of this guide describes.

What counts as E(g) light industrial, offices and research uses?

Class E(g) covers uses which can be carried out in a residential area without detriment to its amenity, in three limbs: E(g)(i) offices to carry out any operational or administrative functions, E(g)(ii) research and development of products or processes, and E(g)(iii) industrial processes that pass the residential-amenity test, which is the modern home of light industrial use. Electronics assembly, precision engineering, joinery at modest scale, food production without significant emissions and many maker and studio uses sit comfortably in E(g)(iii).

The radical feature of class E is internal flexibility. Movement between uses within the same class is not development, so a unit lawfully in class E can in principle shift between light industrial, office, research, retail or gym use without planning permission, subject to its conditions and lease. That flexibility is why hybrid units mixing workshop, studio and office space, the product covered in our guide at /property-types/hybrid-flex-space/, have become so attractive to investors: the planning envelope lets the space follow demand.

The flexibility has limits that matter in practice. Planning conditions on the original consent can restrict a unit to a narrower use than its class would allow, and such conditions are common on employment estates precisely because councils feared class E would erode industrial land into retail and leisure. Local plan policies, leases and restrictive covenants add further layers. So E(g)(iii) is best read as a wide door with several possible locks on it, and each lock needs checking on the specific unit, a job a planning consultant can do quickly against the planning register.

Which industrial uses are sui generis?

Sui generis uses are those excluded from every class, either expressly by the Use Classes Order or because they fit nowhere. In the industrial world the express exclusions matter most: scrapyards and yards for the storage or distribution of minerals or the breaking of motor vehicles are sui generis, as are waste transfer and certain other waste uses. Large-scale open storage as a use in its own right also commonly operates as sui generis where it falls outside what B8 covers on the particular facts, and many of the yards in the open storage market trade on exactly such consents.

Vehicle-related uses are a recurring sui generis cluster: petrol stations, car washes, vehicle hire depots and the sale or display of motor vehicles all sit outside the classes. MOT and vehicle repair operations are a genuinely mixed picture, capable of being light industrial in E(g)(iii) where the activity passes the residential amenity test, B2 where it does not, and sui generis in some cases where the planning history or the mix of activities, such as repair combined with sales, takes them there. The label on the door tells you nothing; the planning history tells you everything.

The consequence of sui generis status is that any material change of use, in or out, needs planning permission, because there is no class to move within and almost no permitted development to rely on. That cuts both ways for owners: a sui generis consent is inflexible, but it can also be a moat, since competitors cannot easily create rival consents. Lenders take a specific view of sui generis assets, typically lending more conservatively against single-purpose consents, and finance for yards and similar assets is often arranged through specialist lenders who understand the use, something we deal with regularly on open storage transactions.

Can you change between industrial use classes without planning permission?

Sometimes. Within class E, movement between E(g)(i), E(g)(ii), E(g)(iii) and the rest of class E is not development at all, so no permission is needed, subject to conditions on the original consent. Beyond that, the General Permitted Development Order grants specific rights with size limits and conditions attached. Long-standing rights allow changes between B2 and B8, and from E(g)(iii) to B8, within floorspace limits, historically capped at 500 sq m for moves to B8, and B8 or B2 can change to E(g)(iii) in defined circumstances. Class MA separately permits change from class E to residential subject to prior approval and conditions, a right aimed at offices but with consequences for any class E industrial unit.

Permitted development rights come with traps. Many require a prior approval application to the council before the change is made, several are disapplied in conservation areas or where an Article 4 direction has removed them, and any planning condition restricting the use of the unit usually overrides the permitted development right entirely. The floorspace limits also bite on exactly the mid-sized units this site covers. None of this is safely navigated from a blog post, including this one: confirm the current position on the specific unit with a planning consultant before relying on any permitted change, because the rules are amended frequently.

It is also worth distinguishing what these rights are for. Permitted development between industrial classes exists to let businesses evolve without bureaucracy, not to let owners reposition assets wholesale. Where the strategy is a genuine repositioning, say a tired B2 works becoming a trade and distribution estate, the robust route is usually a full change of use application, which creates a clean, evidenced consent that valuers and lenders can rely on without caveats.

How does a change of use application work?

Where a change is material and no permitted development right covers it, you apply to the local planning authority for planning permission for the change of use. The application is decided against the development plan and material considerations: employment land policies, traffic and parking, noise and neighbour amenity, and increasingly the council's industrial land supply position, since many authorities resist losing industrial floorspace and some resist intensification that squeezes out lower-value industrial occupiers. Supporting documents typically include a planning statement, transport and noise assessments where relevant, and drawings of any physical works.

Determination targets are eight weeks for minor applications, longer in practice where committees, consultations or section 106 negotiations intervene. Conditions on the consent deserve as much attention as the decision itself, because hours-of-use, vehicle movement or occupier-type conditions written to protect neighbours can quietly narrow the asset's market for decades. A planning consultant earns their fee twice on a change of use: once getting the consent, and once keeping the conditions workable.

Finance has to bridge the planning gap. A buyer acquiring a unit whose value depends on a consent not yet granted cannot normally raise term debt against the hoped-for use, so these deals are commonly funded with bridging finance, which lends against the asset as it stands and is repaid by a refinance or sale once consent transforms the value: our bridging finance page at /services/bridging-finance/ explains the structure. As a deliberately simple illustration, a yard bought at its current-use value with a 12 month bridge, achieving B8 consent in month nine, can then refinance onto term debt against the higher consented value. We arrange both ends of that structure regularly; the planning risk in the middle belongs to the borrower and their planning advisers.

Why does use class matter to lenders and valuers?

A valuer values the lawful use, not the actual one. If a unit is being run as a busy trade counter but its lawful planning use is light industrial only, the valuation for secured lending will reflect what the planning position supports, and any value premium from the unauthorised use evaporates from the loan calculation. Valuers also read use class as a liquidity signal: a B8 unit in a strong logistics market has the deepest pool of alternative occupiers, while a narrowly conditioned or sui generis consent shrinks the market the lender would sell into after a default.

Lenders translate that into terms. Mainstream consents with broad occupier pools support the fullest loan to values and the keenest pricing on a commercial mortgage of the kind described at /services/commercial-mortgages/; restricted or unusual consents push leverage down and pricing up, or move the deal from high street lenders to specialists. Planning conditions feed directly into credit decisions: a personal consent, a temporary consent or a condition tying the use to a named operator can each make an otherwise straightforward loan difficult, because the security no longer outlives the borrower's business. Most commercial lending here is unregulated; where a transaction would fall within FCA regulation, for instance through security over a home, the rules differ and we identify that early.

An industrial unit is ultimately a legal permission wrapped in steel cladding, and the permission is the part that cannot be rebuilt with a contractor.

The practical takeaway for buyers is to treat planning status as a price and finance variable, not a legal formality. A unit with clean, broad, unconditioned B8 or E(g) use is worth paying for, because it borrows better and sells better. A unit with a doubtful or narrow use needs the doubt priced in, and the finance structured to match, which usually means shorter-term debt while the position is regularised. We see the difference in lender appetite on almost every industrial transaction we arrange.

How do you check an industrial unit's lawful use?

Start with the council's planning register, which is online for every English authority: search the address and its history for the original permission, subsequent consents, conditions, refusals and enforcement notices. The original consent and its conditions are the foundation, but the lawful use today can differ from it, because uses change lawfully under permitted development, and unlawful uses can become lawful through the passage of time, generally ten years for a change of use, after which enforcement is barred.

Where the documents do not settle it, the formal instrument is a certificate of lawfulness: a CLEUD for an existing use, or a CLOPUD for a proposed one. A certificate application is decided on evidence, not planning merit, so statutory declarations from occupiers, rates records, leases and dated photographs all count. For a use relying on the ten year rule, assembling that evidence before a sale or refinance is far better than during one, because lenders' solicitors raise lawful use enquiries as standard and an unanswered enquiry stalls the whole transaction.

On any purchase, the checking belongs in due diligence alongside title: your solicitor raises planning enquiries, the local search reveals notices and directions, and a planning consultant interprets what the history actually permits, including whether an Article 4 direction has stripped permitted development rights from the area. None of this is expensive against the cost of getting it wrong. An industrial unit is ultimately a legal permission wrapped in steel cladding, and the permission is the part that cannot be rebuilt with a contractor.