Following the collapse of the financial services sector in 2007, office blocks across the land became empty as businesses closed. Simultaneously the demand for homes became a major agenda item for the Conservative Party. Changes to Permitted Development Rights (PDR) were considered necessary to deal with unused office space and assist with providing residential opportunities instead. This magazine has carried various reports about this issue from commercial letting agents in issue 11 of Insight Magazine (see p32 and p36). It has been possible since May 2013 to convert a building from being an office into residential use without needing planning permission. This policy of deregulation was primarily intended to boost the supply of housing but also to help regeneration through reuse of unneeded commercial property.
The impact assessment for this policy change predicted that:
• There would be no financial costs from this change
• There could be administrative cost savings to local planning authorities
• That the applications for change of use under this policy would be small in number
• That this was unlikely to lead to housing in unsustainable locations.
Today, we are finding that this issue has gone too far. Commercial property prices in Hertfordshire are rising quickly and by as much as 40% to 50% in some cases. As a further consequence rents for commercial property are also rising as availability of space becomes restricted.
We are also seeing the unintended consequences of this change. Today, we are witnessing the termination of office rental leases as landlords are requesting their commercial customers to leave their buildings in favour of a conversion to residential use where the return is greater and the opportunities for rental are more plentiful.
The long term impact of these policies if not checked soon will lead to:
• Uncompetitive office costs
• Insufficient choice of space available within the county
• Less businesses starting life in Hertfordshire
• Less jobs available to support the new homes settlers in Hertfordshire
It is time to take a serious look at this issue. The original announcement was that these PDR changes would remain in place until May 2019. This would give local planning authorities time to make Article 4 directions to remove these rights and implement a requirement for proper planning procedures for any future change of use.
Let’s hope they have!
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