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Report reveals dramatic increase in London office-to-residential conversions

Out-Law News | 04 Aug 2014 | 5:09 pm | 1 min. read

Applications for office-to-residential refurbishments in London have dramatically increased since the government introduced new permitted development rights in May 2013, a report has found.

The government introduced a right to convert offices to homes without the need to apply for planning permission in May 2013. The Estates Gazette's 'PD Rights - Office To Residential' report compared the numbers of applications for office-to-residential conversions in the capital since May 2013 with the numbers for previous years.

The report revealed that the combined number of applications, including conversions involving demolition of the previous office buildings and those involving refurbishment for residential use, had roughly doubled since the new rights were introduced. Applications made through the "normal" process were up slightly to 10,286 units, compared with just under 10,000 units in the year to May 2013, but an additional 8,924 units had been applied via the new permitted development route.

Applications for conversion by refurbishment of office buildings, rather than by demolition, had increased more than tenfold, the report found. Nearly 90% of these applications were made through the new permitted development route, a figure that rose to 98% in London's outer boroughs.

The report also highlighted differences between application patterns in different inner London boroughs. Refurbishment applications in the London borough of Islington showed a particular increase, from an average of 45 units per year between 2005 and 2013 to 617 units since May 2013, with every application since the new rules were introduced coming via the permitted development route.

The report suggested that the lower relative application costs and lack of affordable housing requirements under the permitted development rules might be making conversions viable in places. However, it was noted that, of the 2,442 units applied for in inner London under the new rules, construction had started on only 203.

"Permitted development rights are stimulating growth in the capital, but at what cost?", said Nigel Evans, head of research group London Residential Research, according to an Estates Gazette report. "Affordable housing provision is suffering. Normal conversions since 2011 generated a total of £53 million for the inner London boroughs in lieu of affordable housing provision from 584 private homes. This year, permitted development right applications have the potential to generate 2,442 private units."