This week the government has confirmed that Permitted Development Rights (PDR), allowing the conversion of office space to residential use without full planning permission, will no longer expire on the 30th of May 2016 but are here to stay. Here two property specialists comment on the move.
Under PDRs, developers have the ability to change the use class of Class B1 (a) offices to Class C3 residential dwellings, although a number of areas are presently exempt from this legislation. The majority of these areas are located in and around London, largely due to the current high demand for office space, and in conservation areas where the character of an area of acknowledged importance is threatened.
Associate surveyor at Prop-Search Samantha Jones warns local authorities currently exempt from the ruling that it will be necessary to issue an Article 4 direction should they wish to remain untouched by PDR.
She says; “Currently, 17 areas are exempt from the office to permitted development right introduced in 2013, particularly in and around London.
“These councils now have until May 2019 to invoke an Article 4 direction which revokes the permitted development right, meaning that developers would have to submit a full planning application.”
PDRs were first introduced as a means of enabling the government to achieve its current aim regarding residential supply, which will see around one million new homes created by 2020. The government’s announcement reveals that the legislation will go one step further to ensure this target is met, allowing the demolition of office buildings and new build as residential use, although this will be subject to limitations and prior approval by the local planning authority in any given area.
In addition, developers may now seek further afield in terms of property class when searching for properties suitable for transformation into residential use. However, again, prior approval by the local planning authority will be required when changing the use class of light industrial buildings and launderettes.
The decision to extend PDRs indefinitely may prove controversial as, in 2014 alone, research from the British Council for Offices showed that 603,000 sq ft of office space was converted to residential use in England. Ms Jones warns that the long term implications of PDRs could put severe pressure on the commercial market in key regional areas, particularly if councils fail to issue an Article 4 direction.
She concludes; “Earlier this year the Government was warned to tread cautiously when considering extending this legislation.
“When first introduced, permitted development rights had been intended to stimulate the residential market by increasing the housing supply and bringing life back into neighbourhoods blighted by a glut of empty buildings, which may have otherwise reached the end of their economic life.
“However, in certain areas this appears to have created a dire shortage of office space, with many occupier requirements going unsatisfied.”
Property consultants Stiles Harold Williams have also commented on the decision, saying the confirmation by Planning and Housing Minister Brandon Lewis MP means more underused offices can be converted into flats to meet acute housing need, as well as an option for demolition / new build. Of particular importance is clarification that any already approved schemes have three years in which to implement the consent.
Between April 2014 and June this year, almost 4,000 conversions were given the go-ahead. Stiles Harold Williams alone have been instrumental in the sale of more than 1,000,000 sq ft of ex-office capacity across the South East and beyond, bringing hundreds of much needed homes onto the market. In Croydon alone this has resulted in the creation more than 3,000 units.
To further support the delivery of new homes, the rights will also allow the demolition of office buildings and new building for residential use. In addition, new permitted development rights will enable the change of use of light industrial buildings and launderettes to new homes.
Ian Coomber, Head of Planning for Stiles Harold Williams said: “This is a key announcement which we have been anticipating for some time. The development sector has been in hiatus for the past six months, with developers unsure if they could meet the strict May 2016 implementation date.
“This game changer has been well received and we expect the market to be reinvigorated with this announcement. Further changes to Permitted Development is expected over the coming months as the government aims to build one million new homes by 2020.”
Richard Plant, Head of Development Consultancy for SHW said: “This is a long awaited and very welcome announcement that provides much needed certainty in the development market. Whilst we hoped we knew it was coming it is vital to have clarity which will enable developers and landowners to take decisions about their buildings.”
