The factors that will determine how many offices are demolished for housing, by Richard Garlick

As Peter Bill, our property market insider, commented last week, there are excellent reasons to think that developers will make plentiful use of the new permitted development right to demolish offices to make way for new homes.

Until now, the rules restricted property owners who wanted to replace offices with homes to following the conversion route - unless, that is, they were prepared to put in a planning application. Even so, it has proved popular, with almost 4000 conversions being given the go-ahead between April 2014 and June 2015.

But developers say that the extension of the right to allow demolitions opens up all sorts of new possibilities for them. Buildings that they previously saw as unsuitable for conversion may well sit on sites that, once cleared, they would view as ideal for housing. In areas with high land values, flats created in the shell of a nondescript office block might not have sold for enough to make the scheme attractive to developers. But, if they could start with a clean slate, and build high spec luxury flats on the site, the sums would look very different.

This new freedom for property owners will often not look as appealing to planning authorities charged with defending the public interest, however. If the rules governing the demolition right are the same as those that affect the conversion equivalent, then councils will not be able to secure affordable housing and other planning obligations on such schemes. More generally, authorities will have to face up to a stream of applications for approvals to change the use of offices in locations where they may never have expected to see significant new housing, and which lack the infrastructure to support it.

Just how many of these applications councils will receive will depend on the conditions that are attached to the demolition right when the government sets out further details in due course. If such schemes are exempt from section 106 obligations and the Community Infrastructure Levy, councils can expect a lot of developer interest. If the prior approval process, which replaces the planning application process for projects that enjoy permitted development rights, is no more arduous for demolitions than it is for conversions, authorities should anticipate even more applications.

Richard Garlick, editor, Planning//richard.garlick@haymarket.com


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