How ministers' proposed new freedom to demolish offices for homes could play out

Developers are showing a keen appetite for the government's proposed permitted development right allowing the demolition of commercial buildings for homes, but practitioners say council concerns are likely to prompt a complicated prior approval process.

Demolition options: government consultation proposes new permitted development rights to knock down commercial buildings and replace with homes
Demolition options: government consultation proposes new permitted development rights to knock down commercial buildings and replace with homes

It was a matter of days after this year’s Budget announcement when Grant Leggett received his first excited phone call. It was from a developer interested in newly announced plans to allow demolition of commercial buildings to make way for housing – without the need for planning permission. Leggett, a director at planning consultancy Boyer, said: "All of a sudden, every office building across the country is up for grabs. It’s potentially huge."

Developers have been allowed to convert offices to housing without planning permission since May 2013. Ministers now want to go further. A consultation published alongside last week’s Budget outlined proposed changes to the permitted development regime (see News Analysis, p8). It states that office-to-residential conversion "does not always allow the full potential of a building or site to be realised". Ministers are now proposing that commercial buildings could be demolished and rebuilt as housing with just a prior approval from the local authority.

This idea has been floated before. In October 2015, the government suggested that office buildings could be demolished to make way for homes under permitted development rights. The policy resurfaced at the following year’s Conservative Party conference and by the 2017 Autumn Budget, the plan had been broadened to include all commercial buildings. Only now has the policy made it into a formal consultation paper.

Dr Ben Clifford is a senior lecturer in spatial planning and government at the Bartlett School of Planning, and the lead author of a report published in May this year on the impact of permitted development rights for office-to-residential conversions. Clifford said the policy is probably being considered anew "because the number of officeto- residential conversions is going into decline". He added: "Many of the easy win sites have been done and they want to maintain a certain rate of delivery of new housing. It makes you wonder how far they are going to push permitted development to boost housing numbers." Clifford’s report found office-to-residential conversions had "allowed extremely poor-quality housing to be developed" and he has the same quality concerns about the current proposal.

The government has acknowledged that the demolition and redevelopment of buildings is "more ambitious" than the current conversions policy, and has invited suggestions on how the prior approval process "could be best used to mitigate the impacts" of such development. The consultation document recognises that "the planning of how the vacant site is newly configured and the nature of the new residential building" would "require a wider range of considerations".

It suggested that a new right "focused on smaller sites may be more practical" and consideration of the new building’s height and density and the site’s existing use may be necessary. The Community Infrastructure Levy "may be liable on any development brought forward in this way", it added.

For Dr Hugh Ellis, interim chief executive at the Town and Country Planning Association, such considerations expose a fundamental flaw in the government’s reasoning. He said: "They are saying they are worried this could have some negative impacts. If you put in those safeguards, you would need full planning permission."

Paul Seddon, president of the Planning Officers Society, offered a similar assessment. "The question of whether the development is acceptable in principle is all that is being got rid of," he said. "There’s also all of the issues raised by office-toresidential permitted development rights – no section 106 agreements, no affordable housing and no real placemaking. That is all very dangerous and will harm the reputation of the whole planning system."

Seddon added that "if residential land values are significantly above commercial values", the proposed policy could result in "the displacement of important commercial uses". As a result, he suggested many councils would seek to implement article 4 directions revoking permitted development rights across their entire districts. "The consequences would be an awful lot of wasted energy put into trying to rectify something that shouldn’t have happened in the first place," he said.

Leggett said ministers will either have to create a new approval process that is "so complicated" that there will be little to distinguish it from the existing control regime, or push ahead with a policy sure to generate vociferous opposition. He said: "Every local authority in the land is going to lobby very hard to have a say about height, design, quality, possibly section 106 and affordable housing. If these get into the prior approval process, which in many ways they should, you’re basically making a full planning application anyway."

While Leggett expected plenty more interest from developers, he predicted that the final policy may turn out much less radical than the consultation suggests. "It’s going to prompt an awful lot of phone calls from developers to consultants," he said. "But I can’t see how it can work in a meaningful way."

Chancellor Philip Hammond’s Budget, published last week, was accompanied by significant announcements on previous policy proposals and set the scene for further reform.

TEN KEY SIGNALS FROM THE AUTUMN BUDGET


1. Councils should have statutory powers to buy large housing sites for around ten times existing use value, a government adviser has concluded. Former Tory Cabinet member Sir Oliver Letwin’s final review report on build-out rates for permitted schemes recommends that planning authorities in high housing demand areas should be given powers to allocate "single large sites", initially defined as comprising at least 1,500 homes, and given "clear statutory powers" to buy such sites at prices reflecting their value with planning permission. He also recommends a new set of planning rules requiring developers of such sites to provide a diversity of homes. 

2. Parish councils will be granted powers to allocate sites and grant permission for homes for sale to local people at a discount. The Budget report promised £8.5 million to provide up to 500 parishes with support to use planning powers to bring forward sites for homes sold at a discount. It said planning guidance will be updated to strengthen the role of neighbourhood planning and ensure that plans approved in local referendums cannot be overruled by councils.

3. The government signalled that it will move ahead with further reforms to the developer contributions regime. The Ministry of Housing, Communities and Local Government response to March’s consultation on changes to the developer contributions system confirms that it will remove restrictions preventing councils using section 106 receipts towards infrastructure itemised on Community Infrastructure Levy (CIL) "regulation 123 lists". The document says councils will be required to report CIL and section 106 income and spending through statutory "infrastructure funding statements" and proposes to remove the requirement for councils to subject draft CIL charging schedules to two separate rounds of consultation.

4. The government will enable combined authorities with strategic planning powers to take forward a strategic infrastructure tariff. The MHCLG response says that, in the longer term, the government will bring forward proposals for joint planning committees to charge the tariff and review options for giving other groups the same powers. It also wants to encourage groups of charging authorities to use existing powers to support delivery of strategic infrastructure by pooling Community Infrastructure Levy receipts.

5. The government is to explore options for a single spatial plan for the Oxford- Cambridge growth corridor. The Treasury’s response to advisory body the National Infrastructure Commission’s (NIC’s) November 2017 report on the Cambridge-Milton Keynes– Oxford Arc said it is looking at options for a "spatial vision" to coordinate investment in housing, infrastructure and the environment "to support delivery of transformational growth" in the area.

6. Ministers have pledged an extra £500 million to the Housing Infrastructure Fund (HIF) to unlock up to 650,000 new homes. This announcement takes the total HIF pot to £5.5 billion. Allocations will include £291 million to unlock 18,000 new homes in east London through improvements to the Docklands Light Railway and an extra £20 million to develop a strategic outline business case for the East-West Rail project between Oxford and Cambridge.

7. Ministers have pledged to publish a comprehensive national infrastructure strategy next year setting out priorities for economic infrastructure. The strategy will include a formal response to the National Infrastructure Commission’s (NIC’s) national infrastructure assessment (NIA), published in July.

8. The government is proposing to activate powers allowing councils to dispose of public land for planning purposes without ministerial consent. A consultation published alongside the Budget proposes policy changes to extend local authorities’ freedoms to sell their land without seeking consent from the secretary of state, "thereby providing greater flexibility to dispose of surplus land in support of local development objectives".

9. Ministers may sign off compulsory purchase orders (CPOs) to help deliver new towns before proposals are fully worked up, the government said. Draft guidance on the use of development corporations’ CPO powers, published alongside the Budget, sets out the factors ministers will take into account in deciding whether to confirm new town CPOs.

10. The government is proposing to remove existing permitted development rights and associated advertisement consent for new public phone boxes. An MHCLG consultation setting out further planning reform proposals recognises that councils are seeing an increase in prior approval applications for additional public call boxes in city centres, with a subsequent increase in the number of appeals coming before the Planning Inspectorate.


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