THE GOVERNMENT will remove barriers on converting office buildings into residential flats in the hope of easing the housing crisis, it was revealed yesterday.
Planning minister Nick Boles is due to announce the move later this week, which will permit developers to convert many office buildings into domestic residences without needing planning permission.
But the City of London will be exempt from the rule change, as will shops and warehouses. Canary Wharf, however, is unlikely to be given any special privileges.
Demand for commercial property has slumped since the financial crisis and some areas of the country are blighted by low office occupancy rates. At the same time, housing supply has not kept pace with demand and the value of residential property space is up to double that of commercial property, according to Savills.
“If the planning barriers to conversion are effectively removed, this could have a significant impact,” said Peel Hunt analyst Robin Hardy. “The whole country is littered with masses of under-occupied low-value office buildings that would make fabulous residential [property].”
Some London boroughs have fought hard against change-of-use for office developments, amid fears that any homes built as a result will be snapped up by overseas purchasers and drive workers out of the area.
Peter Rees, the City’s planning officer, said: “The City of London has made no secret of our concern about the impact of the proposed change to planning rules upon our role as a world business centre. Property consultants estimate 20 per cent of the office floor space in the Square Mile would be in immediate danger of conversion to flats if we do not achieve an exemption from the rule change.”
Last year developers proposed turning the Centre Point building by Tottenham Court Road underground station into luxury flats.