There is some debate in the commercial property world concerning a potentially significant change to planning laws, which could have deep repercussions across the industry.
In May, the government launched a review regarding the possible relaxation of planning laws relating to turning empty commercial property into residential use. Published statistics show that 129,000 housing units were built in England in 2009–10, the lowest peacetime figure since 1929. During the same period, 7–9% of commercial property was lying unoccupied.
This disparity, according to the Local Government Secretary Eric Pickles, means that in many towns there are ‘office blocks, warehouses and business parks needlessly lying empty’. The Institute for Public Policy Research estimates that Britain will face a shortfall of 750,000 homes by 2025 and the consultation, says Pickles, seeks to establish whether developers can be helped to ‘turn thousands of vacant commercial properties into enough new homes to jump-start housing supply and help get the economy back on track’.
The British Property Federation gives qualified support, saying that ‘the desperate need for housing means no stone should be left unturned in considering new sources of housing supply’, and converting commercial property into residential may be ‘good’ but cautions that it ‘won’t work for all buildings, in every area’.
The City may be one of those areas, advises Peter Rees. In a speech given by the Planning Officer for the Corporation of London, he warns that ‘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’.
He cites the Square Mile as an example, where the high concentration of commercial property is a key selling point to current and prospective businesses. Diluting that concentration may make property development more difficult in the future, he added.
The consultation process runs until 30 June 2011.
