UK: Office To Residential - The New Permitted Development Rights

The timetable

The Government finally announced on 24 January that regulations will be introduced in the spring of 2013 to amend Permitted development rights to allow a change from office to residential use without the need for planning permission.

"Finally" because the policy was first announced in the Chancellor's budget in March 2011. It was consulted upon in April 2011. In July 2012 the Government announced that it would not be implementing the measure. In a statement in September 2012 Eric Pickles announced his intention to revive the policy.

Local planning authorities have been given until 22 February to seek exemption where this can be justified on economic grounds. The draft regulations will be brought forward once local planning authority requests for exemptions have been considered, presumably coming into force in April?

The changes

For a limited period of 3 years a new PD right will allow the change of use from class B1(a) offices to class C3 residential without the need for planning permission. There will be a "tightly drawn" prior approval process which will cover significant impacts on transport and highways, development in areas of high flood risk, land contamination and safety hazard zones.

Other changes proposed are the extension of PD rights to allow agricultural buildings to be used for other non residential purposes. The size threshold applicable to the existing permitted change of use from B1 to B8 and from B2 to B1 & B8 is to be increased and for a temporary 2 year period, conversion will be permitted for some town centre uses.

The office to residential exemption

Eric Pickles has said that exemptions will only be granted in exceptional circumstances where there are "unique local circumstances which should be taken into account" and it can be demonstrated that "the new rights will lead to a loss of a nationally significant area of economic activity or substantial adverse economic consequences at the local authority level that are not off set by the positive benefits that the new rights would bring". Exemptions will be limited to the geographical area justifiable in the light of the criteria.

The City of London Corporation believing that 20% of the office floor space in the Square Mile would be in immediate danger of conversion to flats, is the first to seek such an exemption because of its "concern about the impact of the proposed change to planning rules on our role as a world business centre." The Royal Borough of Kensington and Chelsea has indicated that it is likely to follow suit.

It is thought that the same concerns will apply to business districts across the whole country.

The Government's rationale

The proposal is part of a package of measures to support economic growth. The Chief Planner at CLG describes the measure as "an important contribution to assisting the economic well-being of the country". The Government considers that the loss of commercial premises will be outweighed by the benefit of new housing units, additional construction output and jobs.

The Reaction

Many have expressed concern that measures will erode the supply of office premises. The City of London's Chief Planning officer has warned of the damaging long term impact of the proposed change "The cyclical nature of the property industry means that if developers were to turn offices into residential blocks when times were tough the City's ability to attract and house new firms when market conditions improved would be seriously diminished."

There are already permitted development rights for change of use from warehouse/distribution, light industrial, agricultural and Town centre uses to office use – all of these will in future be able to change to residential without the need for planning permission.

Concerns have been raised about the prospect of housing people in unsuitable accommodation and conflicts of land uses where residential property is cheek by jowl with noisy industrial processes on industrial estates. There are concerns that there will be no opportunity to address traffic/ highway safety/air quality issues or the provision of amenity space or open spaces.

The proposals will also have the effect of circumventing normal housing policy requirements such as provision of affordable housing, secured by design, lifetime homes, renewable energy etc. There will be no opportunity to seek the usual Section 106 obligations to secure infrastructure, schools, health and other community services nor in the absence of a planning permission will liability to CIL arise.

Planning authorities are likely to try and retain some control of the development through the prior approval mechanism which may result in effectively requiring the same information as for a planning permission. Nevertheless the proposals have been broadly welcomed by the development industry which believes these problems can be overcome.

It remains to be seen whether the proposed change will have a significant impact either on the severe housing shortage across the country or upon the drive for growth and the recovery of the economy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.