Budget 2018: Faster permitted development approvals on way for commercial to resi conversions

  • 30/10/2018
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Budget 2018: Faster permitted development approvals on way for commercial to resi conversions
Developers looking to convert commercial properties will see planning restrictions eased and land value uplift calculations amended as the government seeks to help councils regenerate high streets.


The measure was part of a series of moves targeting home building and development announced in the Budget, including cash for local councils and housing associations and support for SME builders.

The permitted development rights consultation proposes allowing upwards extensions above commercial premises and residential properties, including blocks of flats.

It will also allow commercial buildings to be demolished and replaced with homes.

This will be part of a £675m fund for local councils to help redevelop empty shops as homes and offices, improve transport links and re-use old and historic properties.


Developer contributions

The government also published its response to the Supporting housing delivery through developer contributions consultation which was open earlier this year.

It said a simplified system of developer contributions for land value uplift will also be introduced, which would provide more certainty for developers and local authorities.

HM Treasury added this would enable local areas to capture a greater share of uplift in land values for infrastructure and affordable housing.

“The reforms include simplifying the process for setting a higher zonal Community Infrastructure Levy in areas of high land value uplift, and removing all restrictions on Section 106 pooling towards a single piece of infrastructure,” it added.

Government will be consulting on the draft regulations to implement the changes later this year.

Other measures announced in the Budget to help tackle the house deficit, included:

  • the British Business Bank will deliver a new scheme providing guarantees to support up to £1bn of lending to SME housebuilders;
  • £291m from the Housing Infrastructure Fund to unlock 18,000 new homes in East London through improvements to the Docklands Light Railway;
  • providing £653m to 2021-22 for strategic partnerships with nine housing associations to deliver over 13,000 homes;
  • £75m from the Home Building Fund for St Modwen plc, to fund infrastructure to build over 13,000 new homes;
  • a new five-year strategic business plan for Homes England.


Positive impact of conversions

Thistle Finance managing director Mark Dyason welcomed the investment in the planning process.

“There’s no doubt that office-to-residential conversions have had a positive impact on the number of new homes being built so any simplification of this process is to be welcomed,” he said.

“Empty commercial deadwood is helping to regenerate local neighbourhoods around the UK and it’s a trend that needs to continue.

“Coupled with the additional £500m set aside for the Housing Infrastructure Fund, the right noises are emerging from this government.”

However, he questioned the commitment of government to stick to its plans and noted that the revolving door of housing ministers did not help the process.

“There’s zero consistency, often zero ministerial understanding of the property market itself and, to top it all off, never enough time to stick to a coherent game plan,” he continued.

“What many in the property industry would like to see for the benefit of new build is a cross-party working group with a remit that extends beyond the parliamentary cycle and individual budgets.”



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