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Government’s ‘Office-to-homes’ plan detrimental to the supply of London office space

21st March 2013

Government’s ‘Office-to-homes’ plan detrimental to the supply of London office space

Recent legislation has already seen many office spaces converted to residential, having obtained the necessary planning consent. At the moment it is fairly easy to convert the use of space from B1(a) (offices) to C3 (residential). Many landlords have proceeded to change the use of their properties in this way, as the buildings can be worth three times the value when classified and used as C3. Areas such as Mayfair, Knightsbridge and Covent Garden have been hit the hardest, and we now see a significant lack of supply in these hubs.   

Now the government is implementing plans to allow developers the opportunity to convert offices to residential without obtaining planning permission. This proposal has received a lot of criticism, and John Lett, principal planner for the Greater London Authority (GLA) has remarked that, if this proposal proceeds, London could lose four million square metres of office space, the areas most at risk being office space in Central London. Michael Bach, of the London Forum of Amenity and Civil Societies, has described these plans as rushed and unnecessary and has also noted how developers would proceed to convert the offices in sought-after central locations rather than in areas that wouldn’t miss the office space. We would therefore see the small to medium-sized businesses suffer as they become unable to afford to stay in the capital’s centre, given that rents would skyrocket due to the lack of supply. 

Local authorities in London have, however, been offered the opportunity to opt out of these changes if they can justify their reasons, using economic grounds. At the moment 29 of the 32 local authorities have applied to be exempt in some way. The only authorities not to have objected are Redbridge, Barking & Dagenham and Bexley. 

Morgan Pryce is a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.

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