Deregulation set to ease office to resi conversions
Owners of vacant office space – estimated to account for 10-20% of the office stock outside London – will be gearing up to take advantage of the government’s decision to extend permitted development rights to convert offices to flats without going through the planning process.
The deregulation of B1(a) office to C3 residential conversion, which the government hopes will stimulate housebuilding, regeneration and job creation in construction, will expire in three years. At that point the policy would be reviewed, and could be extended.
According to the announcement (Jan 24) from communities secretary Eric Pickles, councils can apply for an exemption if they can demonstrate adverse economic consequences, such as a loss of office space that forces up office rents.
Deregulation will mean property owners can bypass the expense and uncertainty of a planning application, as well S106 negotiations and affordable housing tariffs, and has been broadly welcomed by the property industry.
Ian Fletcher, director of policy at the British Property Federation, said: “Office to residential conversions won’t work for all buildings, or in every area, but any trip through our suburbs soon exposes redundant office space that with the best will in the world is never going to be brought back into commercial use.
“Such conversions will be good for those seeking homes, the wider community and local authorities, who will gain from the New Homes Bonus and council tax receipts that occupation generates.”
Peninsula Heights: converted in 1996
Adam Pyrke, head of London planning at Colliers International, stated: “These new freedoms will give developers a strong incentive to provide new housing across the country. It is likely the schemes will be small scale, but when taken together will provide a valuable addition to higher housing stock.
“It would be a shame if local authorities responded restrictively, seeking to limit this freedom where there is such a clear need for the provision of new housing.”
But Andrew Beharrall, executive director of leading residential architect Pollard Thomas Edwards, struck a note of caution. He told CM: “At the micro scale, I would support a loosening of planning policy to allow flexibility in how people occupy smaller individual buildings; to live in, to run small businesses or to live and work in the same space. That’s how cities like London thrived historically.
“However, at the macro scale, strategic land use is a legitimate tool of economic policy, and planning authorities should continue to control change of use of larger buildings.”
There is also uncertainty over how many new homes could be created. According to Inside Housing, the DCLG has suggested that the scheme would lead to a total of 100,000 new units, with press reports also suggesting that London – which accounts for 40% of national vacant stock – could therefore see an additional 40,000 units built.
But in a report published in 2011, Davis Langdon predicted that 7,000 new dwellings per year could be created. The report also suggested that a surplus of local authority office space would be particularly ripe for residential conversion.
At Colliers, Adam Pyrke suggested that most conversions would be at a small scale. “There are hundreds of office buildings – mostly small scale – all over London that are suitable for conversion and could add a lot of residential. Each one would probably only provide a handful of units but it is incremental.”
Yesterday’s announcement also introduced a two-year period allowing vacant town centre buildings to temporarily change their use, allowing new shops, business start-ups and community projects to set up in high street locations.
And agricultural buildings up to a certain size (still to be decided) will be able to switch to other job-creating business uses, such as shops, restaurants or small hotels, but not to residential use.