More and more landlords are applying to convert empty offices into residential accommodation before a temporary change to the planning system runs out in 17 months’ time, a leading commercial property agent has claimed.
Under the Government’s permitted development rights — introduced at the end of May, 2013, as a way of increasing housing stock and reviving blighted inner-city commercial districts — the owners of office buildings can apply to convert them to residential dwellings, without the need to go through a full planning process.
It’s a three-year temporary fix that has proved increasingly popular. “We have seen a considerable increase in the purchase of suitable buildings and funding of these conversion schemes,” said Samantha Jones (pictured), an associate director at agents Prop-Search.
Due to expire in 2016, the fast track system has meant the regeneration of many office buildings that had reached the end of their economic life, and with suitable properties once again in demand prices have also risen. In the East Midlands, for example, the freehold value of flats has increased by approximately nine per cent.
In the Northamptonshire market town of Wellingborough, developers keen to take advantage of the relaxation of the planning rules have purchased a number of empty office buildings.
Avon House, the former home of Best Deal Insurance, was acquired by a London investor and converted to one and two-bedroom flats. The former job centre and tax office on Queens Street has also been converted and rebranded as The Exchange to provide one, two and three bedroom apartments.
Recently marketed by estate agents Martin Pendered & Co, redundant Oxford House on Wellingborough’s Oxford Street was purchased by a south coast developer before undergoing a multi-million transformation to 40 two-bedroom apartments and four one-bedroom flats.
Other projects underway in the town include the conversion of offices within Granville Chambers on the corner of Midland Road into new homes.
In adjoining Lincolnshire a £1m scheme has been approved to convert the Grade II listed former Benedictine Croyland Abbey and nearby Croyland Hall into 15 apartments. Both historic buildings were previously used as offices for council staff and were left empty after the authority reduced its workforce as part of a cost cutting exercise.
“It will be interesting to see whether the demand for this type of scheme continues beyond the May, 2016, deadline,” suggests Jones. “As the economy gradually shows signs of improvement and demand increases for office accommodation, the ‘weeding out’ of the lower grade stock may well result in inflationary pressures on office rents as demand starts to test supply.”
