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As spring still appears (at the time of writing!) reluctant to arrive, there seems to be no similar delay in the government’s proposed legislation on planning changes. The potential for radical change in London’s commercial property market remains a topic for discussion across the capital.
If, as the legislation intends, offices (B1(a) planning use category) are able to be changed to residential use (C3 planning use category) without the need for planning permission, then the changes in and impact on the capital could be significant.
London is in a different position from much of the rest of the UK. Rural areas or small towns may benefit from the change, allowing a transformation of underused space along the lines of the Portas Review.
However, in London, an already delicately balanced commercial property market and economy may be disturbed by the removal of many buildings from the market. Many landlords would leap at the chance to make the change, given the increased returns available for residential property.
Ahmed Al-Ansari, of Morgan Pryce, comments, “If we see a reduction in the number of offices – which are already in short supply – then the price of rents can only go up. We are already seeing smaller businesses move out of the centre, and this number might increase as a result of this legislation. The centre of London could become a very different place.”
While most London boroughs have applied for an exemption from the legislation, it appears that ‘exceptional circumstances’ are in order for the exemption to be granted. It waits to be seen whether the councils will be successful in arguing these exceptional circumstances.
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.