Office conversion to resi ‘not enough’ to meet housing demand 

by: Heather Greig-Smith
  • 02/05/2017
  • 0
Office conversion to resi ‘not enough’ to meet housing demand 
Three quarters of developers say the government’s decision to extend property development rights (PDR) legislation will boost conversion of under-used office space.

That’s according to a survey by short-term lender Amicus Property Finance. Of these, nearly a third (30%) expect the growth to be significant.

However, only 4% of property developers believe this will have a major impact in addressing the UK’s housing shortage, with the overwhelming majority (86%) thinking it will help only slightly towards narrowing the gap.

The PDR extension was designed to enable thousands of new homes to be built by making use of neglected industrial and office property while preserving the green belt.

Between July 2015 and June 2016, a total of 1,066 office to residential permitted development applications were permitted with prior approval not required and a further 1,480 applications granted with prior approval.

Property developers are also sceptical of the government’s target to build one million homes by 2020: only one in five (21%) believe this target to be realistic.

Keith Aldridge (pictured), founder and managing director at Amicus, said: “We welcome the government’s extension to the PDR legislation. We have assisted many developers in capitalising on the relaxed planning laws and believe it has played a key role in reinvigorating this part of the market. There is clearly a long way to go but it’s certainly a step in the right direction in addressing the UK’s housing shortage.”

Aldridge added: “We’re continuing to see strong demand among landlords and developers for short-term finance from across the UK. While London and the South east remain highly popular among landlords we are also increasing interest from other regions such as the Midlands and the North West, which are offering attractive valuations and yields.”

So far in 2017 Amicus has provided more than £500m of short-term property loans for residential and commercial real estate. Amicus Finance plc aims to receive its banking licence this year.

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