Plans to extend the office-to-residential conversion policy by scrapping the exemptions some councils had from the scheme (with effect from 2016), have been revealed by the Government.

Permitted Development (PD) Rights were introduced by the Government in May 2013 with the aim of increasing the supply of housing. The rules allow office buildings to be converted into residential use without formal planning consent.

This has been welcomed by many as it allows older, low value office buildings to be converted into much needed residential accommodation.

In addition, PD schemes have been a catalyst for the office market as the loss of poor quality office stock may create a lack supply, meaning that new development will be required to satisfy demand.

Caxtons is aware of three 1960s and 1970s local office buildings - one in Gravesend and two in Maidstone - which are currently being converted to residential use.

In London, period buildings that have been used as offices for more than 50 years are being converted into residential space.

However, not all local authorities are covered by PD rules. Some planning authorities with strategically important business districts, particularly in London, were initially granted exemptions.

Specific districts within some boroughs - parts of the City of London and the central streets of Westminster - were allowed to opt out of the planning policy.

The Government now intends to extend the scheme by scrapping councils' exemption areas.

The announcement has been met with concern by many groups in the UK's strategic business regions.

The amount of available office space has been falling at a record rate, in part, as a result of the policy. According to recent research, more than 800,000 sq ft of offices has been lost in the borough of Westminster, partly as a result of the new policy. Another 1.8m sq ft of offices in Westminster is awaiting conversion.

The value of residential property in the capital and other sought-after locations means the pressure to change to residential use is great, making it particularly profitable for developers to convert buildings.

However, worries have been voiced that areas could lose vital office space and, with that, thousands of jobs, slowing economic growth in prime business regions.

Prior approval of the local planning authority is required in relation to conversions affected by flooding, highways and contamination issues.

While PD rules are clearly very welcome in some parts of the UK, in prime business locations the relaxation of planning regulations is adding to pressure on an office supply that is already struggling to keep up with demand.

For advice or information about investing in office-to-residential schemes or Permitted Development rules, contact This email address is being protected from spambots. You need JavaScript enabled to view it. or telephone 01474 567666.

james roberts 7224 SQU

James Roberts

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