Developers have a window of opportunity to avoid building affordable housing under a new Government policy allowing the conversion of offices to residential without planning permission.

The new development rights may also mean developers may be able to avoid a number of key planning contributions. The Government’s planning reform is aimed at speeding up the conversion of empty commercial space into desperately needed housing.

The Department for Communities and Local Government (DCLG) issued a letter to Chief Planning Officers outlining changes to permitted development rights to allow the conversion of offices to residential use without the requirement for planning permission.

New measures to encourage swift and responsive planning system

Secretary of State Eric Pickles said the new measures formed part of the drive to encourage a swift and responsive planning system.

Lasting for three years, the fresh permitted development right will allow conversions from class B1(a) offices to C3 residential to proceed without the cost and delay of a planning application. Under the policy local authorities can ask for exemption where they can demonstrate there would be substantial adverse economic consequences.

The City of London has already argued that the freedom to convert offices to residential could undermine its unique commercial offering. The Royal Borough of Kensington and Chelsea has stated it has vast differences between office and residential property values. The council plans to strongly defend small and medium-sized businesses staying in the area and will be making a strong case to Government for an exemption.

Greater flexibility welcomed for re-use of commercial premises

Amy Jones, Senior Planner in our Planning and Development team, said: “We welcome the principle of allowing greater flexibility for the re-use of commercial premises which are often restricted by planning policy, leading to significant periods of vacancy.

“An interesting outcome of the proposed change will be allowing developers to avoid affordable housing and a number of planning contributions. This will encourage conversion in areas that may not have previously been viable. 

“However, we anticipate developers will seek to utilise these planning rules in higher value areas, which tend to be where local authorities have sought to oppose this change in regulation, most notably the City of London Corporation.

“From a London perspective, there is approximately 6.8 million sq ft of vacant office floorspace within the City of London and an additional 9.2 million sq ft in the rest of Central London and the Docklands. This provides significant opportunities for developers and landowners.”

Changes will impact commercial stock in future years

However, she struck a note of caution: “These changes are also likely to significantly affect the stock of commercial floorspace in future years as converting back from residential to commercial use is restricted by division and ownership.

“This represents a limited time period for commercial land owners to increase the value and development prospects of their sites and estates. Conversions undertaken under these new rights will be subject to a prior approval process yet to be detailed.

“In addition, local authorities can seek an exemption to the rules under exceptional circumstances. We keenly await more detail on the prior approval process and confirmation of exempt locations.”