There has been much heated debate amongst commercial property professionals since March of this year, when chancellor, George Osbourne, announced his initiative to relax planning laws and remove red tape, making it easier to convert commercial property into residential space.
Roger Bootle, managing director of Capital Economics and economic adviser to Deloitte, has this week declared in The Telegraph, that whilst he does back the initiative and feels it is a good idea, he also feels the government is in danger of ruining their commercial property plans. It appears that even when declaring support for the initiative, many commercial property professionals think the government is also making mistakes.
Mr Bootle wrote in The Telegraph, ‘the proposal to allow conversions of commercial property to residential use without having to seek planning permission. This is just the sort of policy that the Government should be adopting: it would improve the supply capacity of the economy and boost aggregate demand. Yet it wouldn’t cost the public purse a penny.’
However he feels the government are not going as far as they should be with these proposals and thinks more can be offered. Mr Bootle says that the initiative should be widened to include all forms of commercial property. At present retail commercial property and office property is not included in the scheme.
He wrote: ‘There is a snag, though. The Government’s proposal does not apply to retail property. Since so many of the properties which might be converted are unused high street shops, this is regrettable. Indeed, in many cases, these retail properties were once residential buildings anyway. Incidentally, the same applies to offices – I am writing this in an office building which was originally an elegant, 19th century townhouse.’
The government wishes to exonerate retail space from this scheme in the hope that when economic growth is seen, vacant retail spaces will again open its doors to shoppers. However, Mr Bootle pointed to the fact that many retail commercial properties are lying empty due to the technological advances in the retail market, such as the internet.
Despite some criticism, the majority in the commercial property sector remain behind the scheme.
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