Birmingham was the national leader for approving applications to convert offices into flats under relaxed permitted development rights (PDR) between April 2014 and June 2015, refusing the fewest of any local authority outside London. These findings come on the heels of the government’s announcement that these relaxed permitted development rights will be made permanent.
New research by Daniel Watney LLP, a full service property consultancy, found 42 of 43 office-to-residential applications were approved in Birmingham – a 98% approval rate. One in five of around 5,000 applications to convert offices into flats across England were blocked by councils over the period.
PDR allow certain building works to be carried out without a planning application. However, prior approval by councils is still required where certain regulations or consents are needed.
Analysis shows showed 916 of 4,887 applications for office-to-residential conversion (OTRC) were refused on ‘prior approval’ grounds across England. In London one in four (493 of 1,959 applications) were blocked between April 2014 and June 2015, while the average for other cities was one in ten.
This research, based on government data, is the first national overview of OTRC applications since planning laws were relaxed in May 2013. This month’s Housing and Planning Bill will make the relaxed permitted development rights permanent if passed.
The change has proved popular with developers who are able to save time and money through having greater certainty around the planning process and not needing to provide affordable housing. This enhances the viability of conversions – which can often be complex and costly on account of the work needed to fix up old buildings.
While many councils welcomed the proposals - which allowed derelict office blocks to be restored for new homes - others ardently opposed the plans. Six London councils lost a legal challenge in December 2013 to overturn PDR.
Daniel Watney LLP’s research found just over a third of the total applications went through without any council involvement. 36 of the 43 applications in Birmingham in the period went through without needing prior approval.
The high levels of refusals in London, where the bulk of OTRC applications are being made, may be a disappointment to the government which has stated that OTRCs will play a key role in hitting ambitious targets to build 200,000 ‘starter homes’ by 2020. However the government is likely to welcome the general acceptance of OTRC applications in other major cities in England.
Charles Mills, partner at property consultancy firm Daniel Watney, said:
“Office conversions have proven a reliable source of much needed new homes. The prior approval process is important to ensure the safety of developments and the local area - and doubtless many of these rejections will be justified - but councils must not misuse it as a workaround to veto residential conversions that the new permitted development rights were intended to encourage. It is a promising sign that cities outside London have embraced this opportunity.”
Marnix Elsenaar, partner and head of planning at corporate law firm Addleshaw Goddard, said:
“While permitted development rights for office to residential conversions have proved popular on account of removing the need for planning permission, converting old office buildings can often prove more complex and costly than first appears. In some cases the lack of flexibility in design and low ceiling heights can restrict the value of residential units. Understanding and de-risking the potential development risk of old buildings – which may have problems buried below the surface – is critical to making office-to-residential stack up.”