Approvals for office-to-resi converstions fall

Property experts have warned that a fall in approvals for schemes converting office space to homes could leave Tory housing targets in disarray.

So-called permitted development rights (PDR), which allow conversions to go ahead without planning permission, have been a main driver of growth in housing supply since being announced in 2013.

Nearly 14,000 homes were delivered in England last year from PDR conversions, providing three-quarters of the growth in housing supply in 2016 to 190,000. The government’s target is to build 200,000 new homes annually and a million new homes by 2020.

However, experts believe the number of houses delivered by office-to-resi is likely to fall, due to dwindling viable office stock and hostility from some local authorities towards office conversions. Councils can still veto applications for schemes where there are complications around flood risk, highways or contamination.

A total of 2922 office-to-resi conversions were approved in England in 2016, a fall of 10 percent compared with the first year of data between April 2014 and March 2015. Most notably London saw a fall of over a third in the number of approved applications, with 603 schemes approved compared with 951 in the first year.

Some London boroughs have taken out Article 4 directions in order to stop office-to-resi conversions receiving automatic approval. Housing minister Gavin Barwell announced last month that councils that met housebuilding targets without conversions could be permitted exemptions from PDR.

With attempts to bridge the gap between existing housebuilding and the Government’s housing target relying so heavily on PDR, planning experts at property consultancy Daniel Watney LLP warn that the Conservative manifesto will need to spell out how it will make up the potential shortfall.

Charles Mills, head of planning at property consultancy Daniel Watney LLP, said, “There is going to be a clear decline in the pipeline of homes coming from office conversions, which the Conservatives will need to account for at this election. If they want to be taken seriously on their target to build 200,000 new homes a year, they must be clear how they will meet it if the tap they have relied on until now runs dry.

“More pressure needs to be put on London councils to not misuse the power of veto over certain schemes. Many rejections are legitimate, but the Government should not be afraid to take action against councils if there is evidence they are using these powers to prevent development by the backdoor.”

Rory O’Hagan, director at Assael Architecture, added, “PDR conversions currently play a vital role in delivering homes throughout London and the UK, with the slowdown in viable stock and the reduction in successful applications likely to diminish the government’s ability to hit their already ambitious housing targets. Although there have been some concerns surrounding the design and space implications of PDR conversions, when done correctly they can deliver quality homes and drive growth in the market.”