In order boost the residential property market in the UK, back in March of this year, chancellor, George Osbourne, launched an initiative to relax planning laws and remove red tape, making it easier to convert commercial property into housing.
The government reported that there were over 200,000 commercial property units lying empty, many of which are no longer suitable for their original purpose and which could potentially be turned in housing.
Residential property building is currently lying at its lowest level since 1923 and the government hopes the relaxing of planning laws will boost this flailing economy.
The early signs are positive, with residential property schemes in London increasing and Hammerson PLC, planning a residential tower as part of their new £350m Principal Place development scheme.
However, the government initiative has come in for some fierce criticism. In a speech to a British Property Federation conference yesterday, Corporation of London planning officer, Peter Rees, called on the coalition to ensure the proposals do not have the inadvertent effect of driving businesses away. He said, ‘While the Government’s ambition of supporting economic growth and increasing housing stocks is laudable, the Government’s consultation on relaxing planning laws for the conversion of office space to residential properties could have a detrimental impact not only on the City of London but on business districts throughout the UK.’
Mr Rees went on to warn that the government scheme could prove to be very short sighted, saying: ‘The cyclical nature of the property industry means that if developers were to turn offices into residential blocks when times were tough, the City’s ability to attract and house new firms when market conditions improved would be seriously diminished.’
Along with this, Mr Rees believes if the initiative is implemented, ‘the City would no longer be a commercial district and London would loose its role as a world financial centre.’
