Implementation of new rules in relation to the conversion of offices to residential property

February 26, 2014

In January 2013 we published an article detailing the governments’ intention to implement legislation allowing offices to be converted into homes without planning permission.

Since then things have moved on considerably. Legislation was amended in May 2013 by the coalition government with the aim to make it easier to convert redundant, empty and under-used office space into new homes. It is hoped that this will promote brownfield regeneration, increase the footfall in town centres and boost housing supply at no extra cost to the tax payer.

Since the introduction of this change there has been a steady influx of applications. A survey by Estates Gazette published on 10 January 2014 has found that there were more than 2,250 applications for change of use from office to residential in the first 6 months since this change was introduced.

In a statement made on 6 February 2014 by the Planning Minister Nick Boles, it was reported that some of these developments are each set to deliver more than 100 homes. It is hoped that this will not only help the government to tackle the much talked about housing shortage across England by utilising existing buildings, but will also create jobs in both the construction and services industries.

Despite the fact that this legislation aims to improve the housing situation, the government has recognised that this new national right may affect areas differently, and have therefore given local authorities the opportunity to seek an exemption, where they could demonstrate that the right would result in adverse economic impact.

In total, 33 areas were exempt in 17 local authorities, following government scrutiny of secondary legislation which resulted in a various high profile high court challenges in which the Government's decision not to exempt certain authorities from the changes was subsequently upheld. To ensure the powers are used appropriately, local authorities are still required to notify the government’s planning department when implementing such an exemption. The Secretary of State has a reserve power to cancel or modify any direction made by a local authority.

Nick Boles stated that as at 6 February 2014 he was aware of 8 local authorities who have made directions which prevent office to home conversions under national rights. These directions vary in extent, some apply to entire local authority areas and others are targeted at specific sites.

In his statement, Nick Boles is clear that Ministers will be minded to cancel local authorities’ directions “which seek to re-impose unjustified or blanket regulation, given the clearly stated public policy goal of liberalising the planning rules and helping provide more homes”.
There has been some confusion amongst local authorities in relation to this national right. The government has found that in some instances authorities appear not to have applied the correctly intended tests to determine applications for prior approval, and have instead sought to levy developer contributions where they are not appropriate. The statement is clear that “unjustified state levies should not be applied in any attempt to frustrate the creation of new homes”.

The key message to the housing industry is that the government act to provide certainty, confidence and clarity, and look to support their investment in the new homes to bring under-used property back into productive use as housing.
The government’s planning department will update their planning practice guidance to councils to provide greater clarity, although no timescale has been given for the issue of the updated guidance.

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