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1 MAY 2018

Impact of extending development rights to office-to-residential change

This research, conducted by a research team led by Ben Clifford from University College London, assesses the impacts of extending permitted development rights for office to residential conversions in England. Utilising an in-depth case study approach, this research sought to determine whether enhanced freedom to change the use of property has threatened the development of sustainable communities through the loss of public revenue and unwelcome externalities.

It has been possible since May 2013 to convert a building from being an office into residential use without needing planning permission. This policy of deregulation was primarily intended to boost the supply of housing but also to help regeneration through reuse of vacant office space. The impact assessment for this policy change predicted that:

  • There would be no financial costs from this change
  • There could be administrative cost savings to local planning authorities
  • That the applications for change of use under this policy would be small in number
  • That this was unlikely to lead to housing in unsustainable location

The research

Key issues considered in the research were the financial implications for local authorities and the broader implications for communities from office-to-residential change of use becoming ‘permitted development’ with reduced scrutiny and control by LPAs.

A qualitative case study approach was taken. Five local authority (LA) case studies were examined (Camden, Croydon, Leeds, Leicester and Reading) to gauge the extent of individual office-to-residential building schemes that have proceeded under PD and the implications on LA revenues, planning and local communities. For comparison, the research also looked at office to residential conversion in Scotland and the Netherlands.

Overall, office-to-residential PD has been a fiscal giveaway from the state to private real estate interests, whilst leaving a legacy of a higher quantum of poor quality housing than is seen with schemes governed through full planning permission.

Key findings

Key findings include:

  • High rates of prior notification were found for office-to residential conversion in all authorities, far more than predicted by DCLG when introducing the policy.
  • Divergent views from stakeholders on the merits of PD, and its impacts.
  • PD has allowed extremely poor-quality housing to be developed.
  • PD residential quality was significantly worse than schemes which required planning permission, even though it clearly was still possible to deliver viable office-to-residential schemes through the more stringent full planning permission process.
  • There was direct evidence of the profitability of conversions for developers and land owners, but little evidence of contribution to the additional public infrastructure required to support the quantity of additional housing seen in the case study authorities.
  • The comparative study of Rotterdam showed the potential for alternative softer governance approaches rather than the hard governance deregulation seen in England.

In response to these challenges, the report makes recommendations regarding the action needed by central and local government, local communities and civic groups and developers and their agents.

RICS Research Trust is now the Property Research Trust

This research was funded by the RICS Research Trust. As of the end of January 2021, RICS Research Trust became fully independent of RICS, and has been rebranded as the Property Research Trust. Find out more here . The Trust supports and promotes high-quality independent contributions to knowledge in the disciplines of land, real estate and construction.