Julian Welch, a Director at Barker Storey Matthews now part of Eddisons, considers the impact of Permitted Development Rights in Peterborough during 2014.
Yes, We Need City Centre Housing, But Where Are All These Residents Going To Work?
Since 30th May 2013, it has been possible to change the use of an office building from its existing planning Class B1 to Residential Use (Class C3) without planning consent, provided that prior approval is obtained covering flood risk assessments, highways and transport impact and contamination.
The measure was introduced by the Chancellor in the Spring 2013 Budget to stimulate provision of housing with City Centres, targeting unoccupied (and in some cases economically unviable) office buildings. Developers often complained about the amount of time and red tape involved in obtaining consent for such ‘office to residential’ conversions, and this was the Governments way of encouraging development of this nature.
And it has proved somewhat successful. In fact, perhaps a bit too successful.
Research carried out by Barker Storey Matthews now part of Eddisons on Peterborough’s office stock levels indicates that over the past 7 years over 575,000 sq ft of office space has been lost to the market, and of that over 340,000 sq ft has been lost in the past 12 months alone, all to residential conversion. It may not seem a lot, but 575,000 sq ft represents somewhere in the region of 10% of the total office stock in the City.
To put into context, 340,000 sq ft equates to roughly 6 buildings the size of the Council offices at Bayard Place on Broadway.
And to compound matters, the City Centre has seen no new offices built in the past 25 years, the last one being Bayard Place in 1990. We are currently aware of at least 3 substantial requirements for office occupiers that simply cannot be satisfied because of a lack of available buildings. It is not surprising that conversions to residential are more attractive to developers than refurbishing offices for future users – the financial rewards are greater, and there is no empty rates liability on buildings that are being converted whilst the work is being undertaken – but we need to be careful that the City Centre office market is not severely damaged in the process.
Yes, there are plans for new office developments in the pipeline, but they are at least 2 to 3 years away at best. So, for the time being at least, it would seem that all of these new City Centre dwellers may need to travel out of town to go to work.