The Government has been forced to delay plans to extend the scheme which makes it easier to convert offices to residential use, amid fears that the permitted development rights legislation is depleting office stock and driving up rents, says commercial property agent Prop-Search.
Prop-Search Director Simon Toseland
The Government was expected to announce an extension to the current legislation, which ends in May 2016, but, to date, no such announcement, has been forthcoming, leaving developers in limbo.
Prop-Search Director Simon Toseland said: “Back in May 2013, the Government introduced permitted development rights to enable a change of use from Class B1 (a) offices to Class C3 residential dwellings, without the need to go through the full planning process.
“This was intended to stimulate the residential market, increase the housing supply, bring life back into neighbourhoods blighted by a glut of empty buildings and promote the controlled use of property which may have otherwise reached the end of its economic life.
“However, a number of councils throughout the country have complained that their office stock is severely at risk of being over-depleted, and in certain instances, this is sharply pushing up values as competition for space increases.”
Indeed, a significant number of councils, largely located in and around London, have already threatened to invoke Article 4 which would effectively nullify the existing permitted development rights, thereby forcing developers to submit a full planning application.
Croyland Abbey Square
In Prop-Search’s region of Northamptonshire, Wellingborough has already seen 60,000 sq ft of office space removed from the market as a result of permitted development. This includes the £1 million conversion of the former council offices at Croyland Hall & Abbey which was left unused after the council reduced its workforce.
Mr Toseland believes that the permitted development rights legislation has its merits when applied in the proper way, concluding; “As a concept, the permitted development allowing the conversion of offices to residential has in general been a sensible move by the Government.
“But it is in danger of being abused at the cost of helping businesses grow out of the recession and once an office building is converted to residential, it is lost forever.
“Going forward, the Government needs to ensure that any extension to this right is applied in a sensible and proportionate way.”
