The purpose was to make the best use of underused buildings and encourage the regeneration of brownfield sites.
Despite the resistance of some local authorities (predominantly London based), who can seek exemptions in exceptional circumstances, such as the loss of economic activity or substantial adverse economic consequences, volume of traffic, air quality, we have seen these developments become incredibly popular in London as developers seize the opportunity to create real value in the property stock.
There are some downsides to this initiative however as there usually is with most things. There is no provision for the council to seek Section 106 contributions from developers for open space, education and health care, thus resulting in pressure on existing schools, open space and infrastructure. Equally there is no requirement for the provision of affordable housing and this will impact the supply of affordable housing in London boroughs.
Yet in the larger scheme of things this move has to be viewed as a positive change. Most young people in London had given up any hope of buying or renting an affordable place, so converting offices to homes will improve their lot.
Around a million people commute into London every day and the London commuter belt now extends from Warwickshire and beyond. In part because of the distortion of foreign buyers, one of London’s biggest problems is the imbalance between homes and jobs. While London is not unique in this respect, increasing the number of new homes and reducing office space will help reverse this trend.
The simple rules of supply and demand would suggest that if significant numbers of conversions take place it will lead to a fall in residential values as more homes come onto the market and a rise in office values as office space becomes scarcer.
Permitted development rights are in place for three years from last spring, at which point the policy will be reviewed.
Robin Johnson is managing director of KFH Chartered Surveyors
