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Conversions of offices to homes rapidly increase


The number of conversions of offices to homes made in London under a permitted development (PD) right introduced in 2013 has soared over the last 12 months, according to a report in the Estates Gazette.

The UK government introduced a temporary PD right in May 2013 allowing developers to convert office space into residences without the need to apply for full planning permission. This temporary PD right is due to expire in May 2016 but the government has not yet confirmed whether it will be extended beyond this date.

According to the report, figures show that work had started on 393 homes approved using the PD right in May 2014 and this had risen to 5,354 in May 2015, an increase of over 5,000 conversions.

The report also specified that the London Borough of Croydon is the most popular location for office-to-residential conversions with over 30% of the works being carried out in Croydon. However, there are 9,266 potential applications and permissions still in the pipeline; this could shift the most popular areas to Harrow and Hounslow.

Local authorities have raised their concerns regarding the impact on the supply and quality of office space available in London. Key locations for offices have been lost as they have now been converted to residential units and rental prices for office spaces have increased in some areas. Some local authorities, including Croydon, have removed the use of the PD right in parts of their administrative area using an Article 4 direction.

A further concern noted in the report is the loss of potential affordable housing as local authorities cannot impose planning obligations when developers build new homes under the PD right. According to the report, 4,000 potential affordable homes and £225 million in affordable housing contributions have been lost.

Last month, London Assembly members agreed a motion stating that the May 2016 deadline "should remain and that no attempt should be made to extend these rights or make them permanent".

Housing and planning minister Brandon Lewis confirmed at a meeting of the communities and local government select committee last month that the government was "looking to make an announcement around the future for [PD] rights relatively soon".

Planning expert Susanne Andreasen of Pinsent Masons, the law firm behind Out-Law.com, said: "It is not surprising to see an increase in the use of the office-to-residential PD right as the May 2016 deadline looms. Since the introduction of the right in 2013 there have been various indications from the government that the right could potentially be extended or replaced by a permanent right."

"However, with just over six months left before the current right expires and no proposals set in stone, developers wishing to take advantage of the right are understandably keen to ensure they get their prior approval applications processed and conversions completed in time," Andreasen said.

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