More than 1m sq ft of West End offices converted to homes in 2012, study shows

According to the study (4-page / 180KB PDF) by property consultants HS2O there were 173 applications for office-to-home conversions within the area in 2012. Of the 117 applications which gained consent, 38 were implemented, amounting to 1,170,639 sq ft of converted space. A further 65,305 sq ft of office space was converted as a result of consents gained during 2011.

The figures showed that 695,100 sq ft of office space have valid consents for conversions to homes granted in either 2012 or 2013 which have not yet been implemented. The report also said that there is a "substantial raft" of buildings which have been publicly earmarked for conversion but which have not yet entered the planning process.

The study noted that Westminster City Council has been reported to be considering the introduction of a mechanism requiring developers to offer commercial space to counter the rise in office to home conversions.

It said the Council had discussed introducing a planning requirement for offices to be included in housing schemes, or charging an off‐site offices payment equivalent to the reverse of an affordable housing contribution, which could become part of its emerging Local Plan.

“As this latest update vividly illustrates, the rate of conversion in Westminster continues to accelerate," said H2SO head of office agency Paul Smith. "Even though prime office rents are now moving up to around £120 per sq ft, residential capital values remain well above the commercial use equivalent in most sub‐markets, and so the conversion trend looks set to continue."

“At the end of last year, it appeared that Westminster Council might move to curtail the trend. However, it now seems to be more likely that rather than take a hard line on conversion applications, the council may impose a ‘conversion levy’ to help it claw back the loss in business rates and support office provision elsewhere in the borough,” Smith said.

The parts of Westminster's borough which fall within the Central Activities Zone were granted an exemption from the new permitted development rights allowing conversions from offices to homes without the need for planning permission which were introduced by the Government in May.