Posted on 9th February 2013

Why We Could Soon be Living in the Office

Office and shop space looks set to be converted into new homes following a move by the Government to increase housing stock. The new policy is also designed to prevent the use of green field sites for additional housing development and also to give a much-needed boost to the construction sector as well as to bring redundant buildings back into use.

For a trial period of three years (from January 2013) the conversion of office space to residential use will be allowed under Permitted Development in England, meaning a planning application will not be necessary. The move represents a radical overhaul of the planning system, as currently getting permission to convert an office block to residential use can be prohibitively expensive. That is why many such schemes fail to even get off the starting blocks and why office space is all too often left vacant due to bureaucratic inaction.

Planning minister Nick Boles said that the relaxed rule would help improve the planning system and make it adaptable to changes that should help boost the economy. Local authorities can seek an exemption to the rule by issuing a restriction on Permitted Development Rights on certain buildings if they can demonstrate that there would be "substantial adverse economic consequences to converting the office space.

These new rules will certainly help to kick-start the pool of homes available to both the private residential and rental sectors. At present, the number of households needing a home will outstrip demand by 750,000 in 2025 if building rates continue on the same downward trajectory as they have done for the past two decades, according to the latest statistics from the IPPR think tank. There will be between 206,000 and 282,000 additional households per year between 2010 and 2025, it has forecast.

Statistics from the department for Communities and Local Government show that the estimated potential for conversion of vacant offices in our region stands at seven per cent of offices long-term empty. It is true that many towns and cities have office blocks, warehouse and business parks needlessly lying empty, while house building is at an all-time low. This is in part because the planning system has tied developers up in red tape. By unshackling developers from bureaucratic planning, vacant office units can be turned into enough new homes to jump-start housing supply and help the construction sector, thereby providing a much-needed stimulus to the still flagging economy.

The government estimates that if all the long-term office space in England was converted it could deliver 250,000 new homes and save just under £140million over ten years by cutting red tape. Only 129,000 new homes were built last year, CLG figures show, and just 2.8 per cent came from office conversions. Any move to encourage usage of a widely available resource is to be warmly welcomed.

By Martin Williamson, Head of Residential Property, Latimer Hinks Solicitors