23 March 2011
George Osborne announced in the Budget earlier today that he will launch a consultation to consider the relaxation of planning rules to allow commercial premises to be converted into residential accommodation, without formal planning consent being required, which could save commercial property owners up to £140m which is currently spent on planning and professionals fees.
A number of empty office buildings built in the 60’s & 70’s can be found in both Portsmouth and Southampton. Many of these have been vacant for years as office occupiers have preferred to relocate to modern properties which have lower running costs due to their more energy efficient design and construction.
Craig Powell, Associate Director at Holloway Iliffe & Mitchell comments:
“Obtaining planning permission for change of use in the past may have meant long and costly delays for an owner considering alternative uses. It is not clear however whether home buyers will want to live in commercial areas previously occupied solely by businesses.”
For redundant commercial properties that are to be redeveloped, which will still require planning permission, investors and developers will be pleased with the promise of a 12 month guarantee for the processing of all planning applications, including any appeals
Stuart Mitchell, Director at Holloway Iliffe & Mitchell said:
“This relaxation of the planning rules will only work if the 250,000 residential units that may be created over the next 10 years, will be affordable to younger buyers who often have to pay substantial setup fees and higher interest rates on mortgage deals available to them.”
The 400 bed “Orion’s Point” student accommodation, in Southampton City Centre, is a good existing example of a redundant office block which used to be occupied by British Gas which was converted in 2003 to provide residential student accommodation with only limited external alterations.
This proposed change to permitted development policy may also allow local councils who own older office buildings to consider their conversion into social housing which may help alleviate the current severe shortage in new social housing stock.