Some nineteen months on from the Governments ground breaking changes to the planning system, commercial property agent Prop-Search reports that developers are increasingly applying to convert empty offices into residential.
On 30th 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 a 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 continued use of property, which may have otherwise reached the end of its economic life.
The changes are however temporary, ending in May 2016.
Samantha Jones, an Associate Director at Prop-Search, said: “We have seen a considerable increase in the purchase of suitable buildings and funding of these conversion schemes. The timing of the change has worked well, as the freehold value of flats has reportedly increased by approximately nine per cent in the East Midlands.”
In Wellingborough, a number of empty office buildings have been purchased by developers keen to take advantage of the relaxation of planning rules. Avon House, formerly occupied by Best Deal Insurance was purchased by a London investor and converted to provide a mix of one and two bedroom flats. The former job centre and tax office on Queens Street has also been converted - now known as The Exchange - to provide one, two and three bedroom apartments.
A redundant office building - Oxford House - on Oxford Street was recently purchased by a south coast developer and a major refurbishment and conversion programme undertaken to create 40 two bedroom apartments and four one bedroom flats. Martin Pendered & Co has since been marketing the freehold investment and confirmed that this is now in the hands of solicitors.
Other projects underway in the town include the conversion of offices within Granville Chambers on Midland Road and a £1m scheme to convert the Grade II Listed Croyland Abbey and Croyland Hall into 15 apartments. Both the Hall and the Abbey were previously used as offices for council staff and were left empty after the council reduced its workforce and running costs were considered too high to continue to use them.
Prop-Search considers that it will be interesting to monitor the effects on the remaining office stock and whether the demand for this type of scheme continues beyond May 2016. 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.
Further information or advice can be obtained from Prop-Search - Tel: 01933 223300 / 01604 492000 or its website: www.prop-search.com