September 15, 2015
The 2013 introduction of new laws which allow greater scope for the conversion of UK offices to residential use is now beginning to have a major impact on the commercial property market, according to a new report from the British Council for Offices (BCO). According to the study, which focuses in particular detail on London and Bristol, more than 6 million sq. ft. of office space was converted to residential use last year following the launch of Permitted Development Right (PDR). This is likely to increase dramatically over the next few years, especially in the capital. A report published last year by Lambert Smith Hampton claimed that there had been a huge leap in applications following the introduction of the new laws and the BCO study confirms the existence of pent up demand from the number of approved schemes yet to be implemented.
The report claims that in London alone, an additional 104 million sq. ft. of office space could be converted in the short term. Meanwhile in Bristol, as possibly in other UK cities, the number of schemes is also gathering pace. According to the BCO, around half of the currently approved conversion schemes have already been implemented, equating to well over 400,000 sq. ft of space.
The PDR scheme has had its critics since its introduction, and the BCO is still urging caution. According to Richard Kauntze, chief executive of the BCO: “With around 6 million sq ft of office space being converted to residential in England in 2014, it is time to take stock and consider the impact of the office-to-residential permitted development right. While the PDR can certainly contribute towards much needed housing, a cautious approach is required. When, in 2013, the Government consulted on the possibility of allowing the conversion of offices to housing without the need to secure planning permission, the BCO stressed the vital need to avoid a free-for-all. This is now more important than ever, as the increase in office-to-residential conversions since the introduction of the PDR represents a growing challenge in how to satisfy office demand.”