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Government delays extension for office conversions

The Government has been forced to delay plans to extend office to residential permitted development rights, amid fears of low office stock and pressure on rents, says commercial property agent Prop-Search.

It had been expected that the Government would make an announcement confirming an extension to this piece of legislation, perhaps until 2020.  But as yet this has not materialised and developers are now in limbo with the current temporary rights ending in May 2016.

Simon Toseland, a Director of Prop-Search, says: “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.”

A significant number of councils, particularly in and around London, have already voiced concerns and threated to invoke Article 4 which revokes the permitted development right, meaning that developers would have to submit a full planning application.  Council have the ability to issue an Article 4 direction when the character of an area of acknowledged importance is threatened.  This is most common in conservation areas.

In Wellingborough a significant amount of redundant spaces has already been removed from the market, primarily in the town centre.  Avon House on Tithe Barn Road, the former job centre and tax office in Queen Street, Oxford House on Oxford Street have all been converted to provide apartment living – removing over 60,000 sq ft of office accommodation from the market.  Other projects include a £1 million scheme to covert the former council offices at Croyland Hall & Abbey which were left unused after the council reduced its workforce and running costs were considered too high for continued use; and the conversion of offices within Granville Chambers on Midland Road.

Simon Toseland concludes: “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.  It will be case of ‘what this space’ as the politicians returned from recess on the 07 September.”

Further information or advice can be obtained from Prop-Search - Tel: 01933 223300 / 01604 492000 or its website:

Thursday, September 10, 2015