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Office-to-resi boom causing 'significant difficulties', says report

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The rush to convert offices to housing under temporary planning rules has prompted fears over the quality of new homes created and the loss of vital commercial space

Reports this week by the British Council for Offices (BCO) and lobby group London Councils have spotlighted the impact of temporary changes to permitted-development rights for office-to-residential conversions introduced two years ago and currently scheduled to run until 2016.

The British Council for Offices (BCO) report said more than 6 million ft2 of office space had been converted into 7,000 new homes under the policy, which does not require full consent for so-called ‘office-to-resi’ conversions.

Both BCO and London Councils said the policy was posing significant difficulties for small businesses in need of office space. The BCO research, which was authored by property consultants CBRE, said that lower-grade offices favoured by smaller firms and start-ups was a mainstay of such conversions, but was not being replaced by similarly affordable property.

London Councils, which represents the intrests of London’s 33 local authorities, said that in addition to being exempt from providing affordable housing contributions, office-to-resi developments did not have to comply with new-housing design standards, and had resulted in the development of ‘many unsustainable and poor-quality schemes’.

BCO chief executive Richard Kauntze said the government should take stock of the progress of office-to-resi to date.

‘While the permitted development right can certainly contribute towards much needed housing, a cautious approach is required,’ he said.

‘The increase in office-to-residential conversions since the introduction of the permitted development right represents a growing challenge in how to satisfy office demand.’

Councillor Claire Kober, London Councils’ infrastructure and regeneration lead, said the negative impact of the office-to-resi phenomenon on the capital was stark.

‘Permitted development rights prevent boroughs insisting on an affordable housing quota meaning that much-needed low-cost homes for rent or ownership agreed through the planning process will not be delivered,’ she said. ‘We urgently need more homes but a planning free-for-all is not the answer.’

Despite consulting on proposals to make permitted-development rights for office-to-resi conversions a permanent fixture of the English planning system, the government has yet to issue its final decision.

CBRE said there was some evidence that uncertainty over what will happen after 2016 was having a ‘drag’ effect on the construction market.

 

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