Since 30 May 2013, it is permitted to change the use of offices to residential use without planning permission. Councils can only intervene on highway safety, contamination and flooding grounds.

The change effectively means that onerous Section 106 requirements and affordable housing quotas can be sidestepped. However, it does not permit any external changes to the building, and developers must notify the relevant local authority about the intended changes of use. This change is temporary, with the window closing on 30 May 2016.

Huge boost for office-to-residential conversion

The sheer scale of opportunity is clear from our Office Market Review 2013: Addressing obsolescence. After analysing 32 regional markets, it demonstrated that 11,500 new homes could be created by converting 7.4m sq ft of the UK’s obsolete office stock. This amounts to 25% of the total recently pledged by the Deputy Prime Minister, Nick Clegg. This relaxation of planning law will allow many sites, held up by out of date employment allocations and outdated policies on the protection of employment land, to finally become available for beneficial use.

An opportunity for residential developers

This represents an exciting opportunity for developers, and will be a driving force in the residential and office markets. While the government’s own research thought take-up of this measure would be limited, we believe that it will drive a significant shift in both the residential and office market. We have already made several submissions under the prior notification procedures. In order to take advantage, we believe some office owners may even release occupiers from leases early – particular in higher value residential areas.

Given the window is only open for three years, it’s important to act quickly. If you would like further advice on this topic, please contact Mark Dodds in our planning team.

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This article is part of Asset Class summer 2013