LONDON councils will miss out on funding for key infrastructure projects under government plans to convert offices into housing, City A.M. can reveal.
Westminster council said it alone stands to lose “tens of millions of pounds per year” following the decision to let developers convert office space to residential use without planning consent.
Currently a developer must request change of use permission before converting buildings, enabling the council to charge a levy for local improvements such as transport, education, health, and affordable housing.
But the coalition’s planned three-year exemption from conversion rules will remove the burden of so-called section 106 requirements from developers.
Nick de Lotbiniere of Savills said that at the moment a single office-to-housing conversion in Mayfair can contribute “up to a few million pounds” to council coffers.
“It will create a two-tier market. It’s going to drive developers to look at the conversion of office buildings,” he added.
But he also said it would speed up development in outer boroughs.