Two London planning authorities have taken steps to cut the number of developers snapping up offices and turning them into luxury housing.
In the first move of its kind, owners wanting to convert City of London offices into flats and apartments will have to prove the building is no longer “viable” as a commercial property.
At the same time Westminster City Council has launched a planning consultation on moves forcing developers who want to turn offices into homes to replace the lost work space. If approved the clamp-down is likely to be adopted by other boroughs across London.
The move to protect the Square Mile’s office supply has been adopted by the City’s Planning and Transport Committee as part of its forthcoming City of London Local Plan.
The last minute regulation changes — specifically designed to protect the financial centre’s supply of office space — will demand that developers demonstrate that any building is “no longer viable or suitable in the long term” as office space and that there “is no recent or likely future demand for continued office use on a site or building”.
One recent report claimed the City could lose up to 18 per cent of its office supply under permitted development rights introduced by the Government as a temporary measure in May, 2013. The three-year easing of the planning rules allows owners to convert Class B1 (a) office premises to Class C3 residential dwellings, without the need to go through a full planning process.
Earlier this year the Government hinted it could well make the stop-gap measure — initially introduced to increase the housing stock and breath life back into districts blighted by a glut of empty commercial buildings — permanent. Ministers also suggested the new permanent rules would apply nationwide, removing current exemption areas such as central London.
It’s a prospect feared by the City which claimed it would have “significant adverse implications on its status as a leading financial centre”.
The new clause in the local plan states: “The protection of office accommodation will be applied City-wide, including within or near the residential areas identified in this plan … Where the City Corporation is satisfied that sufficient evidence has been presented to justify the loss of office accommodation located within or near one of these residential areas, then the City Corporation will consider the potential for a change of use to residential use.”
Westminster — which also has the right to call itself a city authority — has also found itself a prime conversion target because it hosts some of the most expensive homes in the world. Last year property prices in the borough rose by around five per cent, well above the London average.
“Westminster has had a long standing and successful mixed use policy which actively requires residential alongside commercial development in the Central Activities Zone,” commented Robert David, deputy leader of Westminster Council.
“While the office market is still very strong, the residential market — once something which needed policy intervention to grow in central London — is now outbidding office revenues at levels that would have been unthinkable a decade ago.”
He said: “Much of this residential growth has come from a change of use of office stock that cumulatively contributed to Westminster’s nationally and internationally important employment base.” Adding, that: “Westminster needs to grow its commercial floor space, particularly offices, in order to remain globally competitive.”
Westminster’s new rules must be approved by the national Planning Inspectorate in order to be enforceable, but the authority claims the figures are compelling,
The borough — which has less than 800,000 sq ft of new office space under construction — has lost 1.8m sq ft of office space in the past four years, with an additional 1.7m sq ft set to be lost to schemes under construction. Developers have already lodged applications for almost three-million square feet of future conversion projects.
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