Why the conversion of office space to flats will not solve the housing shortage

As part of its housing long-term plan, the UK government proposes to relax further planning rules. The Department for Levelling Up, Housing and Communities wants to extend “permitted developments rights” (PDRs) across England. The Department for Levelling Up, Housing and Communities aims to extend what is known as “permitted development rights” (PDR) in England.

This is seen as a reaction to the fact that multiple councils in England have declared bankruptcy or are warning of their intentions. The housing crisis in England has been identified as the most serious threat to local government solvency.

Homelessness is increasing, private renters are being priced out of the market, homeowners are having difficulty paying their mortgages, and local councils are finding it difficult to provide support.

However, research reveals that homes converted under PDR have a significantly lower residential quality than those with full planning permission, especially in terms of location, size, and amenity spaces.

Extending PDR will worsen the housing crisis due to the loss of local authority supervision. Converting offices into housing will not significantly increase the housing supply to meet the need.

Planning changes made in the past

In May 2013, the UK government tested PDR, primarily in order to encourage the conversion of offices into housing. In 2016, this was made permanent. The changes were made permanent in 2016.

Since 2015, the conversion of offices into housing under the PDR has contributed to 81282 homes in England (net). The data on specific changes in use (such as from office to housing) were not available until 2015. However, net change in use has provided around 12,500 homes each year since 2013.

In 2016-17, the number of conversions to offices reached a peak. This change in use, however, accounted for only 8,359 units (3.6%) of additional net housing (England) by 2021-2022.

Most PDR conversions have been small (below ten units). The number of houses it can provide is far less than the government’s goal of 300,000 homes per year.

It is mixed in the situation. The companies still desire the highest quality of office space in order to boost branding, employee retention, and sustainability credentials.

In the second quarter of 2023, office vacancy rates in Central London reached 9.4%. This is much higher than the average over time of 5.5%. The underlying demand is still high. In the same period, occupiers offered the most space since 2019.

Offices with high-specifications in the city’s center are still highly sought after. Ant Rozetsky|Unsplash

Converting offices can be a difficult process.

The vacancy rate of offices does not always translate to empty buildings or sections that are easily convertible. Converting offices is also an expensive endeavor.

It isn’t easy to convert large buildings into housing. This is especially true when it comes to ensuring that natural lighting and ventilation can reach the central floor areas without windows. The developers must also install extra cabling and pipes for domestic use. New requirements are in place for external cladding. Conversion of many office buildings is not feasible or commercially viable.

Even if converting an office building is viable, high construction costs and interest rates mean that the necessary asking price for properties would likely exclude the private housing market where a . Even if it is feasible to convert an office building, the high costs of construction and the interest rates would mean that the required asking price on properties would exclude the private housing markets where the greatest need exists – first homes.

Finally, office buildings tend to be lacking in features and development potential, which have made older industrial buildings appealing for conversion into luxury homes. There’s also a wider issue that central office districts are often lacking in amenities, such as schools, GPs, and parks.

Developers are more likely to convert older buildings located in industrial parks on the edge of town, as is polarising. In the south-east region of England, Harlow council has placed social tenants in quickly converted isolated office blocks such as Shield House and Terminus House.

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