Last week, London First released research showing that only half of the 50,000 new homes required each year to support the city’s growing population are being constructed.
While chairman of the policy and resources committee of the City of London Corporation, Mark Boleat admits that this is a problem that should be addressed, he believes that an increase in housing should not come at the expense of the city’s commercial stock.
As Mr Boleat points out, a recent survey by Deloitte indicates that availability of prime office space in London has fallen to just 14 per cent in a single year, with the result that vacancy rates have fallen to 4 per cent in the West End. Although part of the reason for this is the large number of businesses choosing to base themselves in London, he argues, another reason is the change in planning rules allowing developers to convert office buildings into residential apartments.
Writing in City A.M. Mr Boleat says; “Start-ups, SMEs and the agile, niche businesses which serve them need space to grow, and the City’s range of office buildings serves these needs perfectly.
“This is why schemes such as the Bishopsgate Goods Yard plan to create luxury housing on an important commercial site are concerning – this is an opportunity to reinforce the business cluster and ensure economic vitality for decades, and it would be wasted by the inappropriate provision of luxury flats on a key commercial site.
“Providing office space in important employment centres which are well served by public transport is integral to the clustering effect that is a large part of the City’s success.”
In response to the mounting concern, the City of London Corporation has implemented a new Local Plan, stating the body’s ongoing commitment to constructing new office space in areas with low supply and protecting existing space which could prove essential to the continuation of economic growth. However, as speculative developments remain relatively rare at present, it may be necessary to encourage further investment in the commercial market.
Mr Boleat concludes; “It is in the long term interests of London to have a City with affordable office space, where dynamic companies succeed or fail on their merits rather than struggle to compete for space with soaring residential values.
“Decimating London’s office stock won’t solve the housing crisis, but it will drive away the jobs that Londoners need.”
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