Office to residential: councils' track records, most overturned grounds for refusal, and more...

Our analysis tells you which councils approve the highest proportion of permitted development applications to convert offices to housing, which grounds for refusal are hardest to overturn at appeal, and much more.

Terminus House, Harlow (pic: Getty Images)
Terminus House, Harlow (pic: Getty Images)

"An oppressive environment for residents" was how one inspector described a proposed office-to-residential permitted development conversion in which residents’ windows would have been fastened shut to prevent noise disturbance (DCS reference 400-021-785). In another appeal, the inspector said noise from a nearby industrial area "would not be conducive" to allowing future residents to open their windows in warm weather (DCS reference 400-021-097).

Both appeals raised the sort of issues that have made office-to-residential permitted development highly controversial. And the dismissal of both of them illustrates the difficulty for developers of winning appeals against refusals of such schemes when noise is the dominant issue. Planning and its sister service DCS have carried out an analysis of appeals against refusals of prior approval applications for office-to-residential conversions in the period since the government bestowed such conversions with permitted development rights in 2013.

The statistics reveal that, of the 23 cases in which noise was a key issue, 16 - almost 70 per cent - were dismissed, and only six were allowed. The issue was introduced into the list of topics for which prior approval must be sought in 2016. In the first seven months of 2019, noise has been the main issue in six appeal cases, five of which have been dismissed.

The Planning Officers Society, which represents public sector planners, says it particularly welcomes the introduction of the test, which assesses noise impact on future occupiers, and notes that a high proportion of appeals hinging on this test have been dismissed. Practitioners concur that, for applicants, the test is a tough one. "It is always hard when noise is an issue," says Matt Richards, director at consultancy Savills’ London office.

ISSUES AT APPEAL

Despite the rising prominence of the noise issue, the figures produced by Planning and DCS show that the two most common issues for such appeals are whether the proposal is permitted development, which has been a key issue in 144 cases since 2014, and transport and highways issues, which has been a key issue in 100 cases during that period.

The figures also reveal a sharp contrast between the results of such appeals, depending on which issue is at stake. For those involving transport and highways considerations, the chances of success for developers are good, with 68 per cent of cases having been allowed. Typical inspector’s conclusions include that parking arrangements are adequate to serve the development, or that the conversion will not have a harmful impact on highway conditions.

By contrast, where appeals hinge on whether the proposal is permitted development, chances of success for developers are much lower. The figures show that just under a third of such cases have been allowed. Typical considerations have been whether the building was in office use at the 29th May 2013 - one of the stipulations of the general permitted development order. Sometimes appeals have found that conditions placed on a previous application prevent the building from being able to qualify for the permitted development. In other cases, the building is excluded from qualifying for permitted development for various reasons, including where the building is part of a listed building or is in a safety hazard area.


Owain Nedin, associate director at consultants Lichfields, says the figures show that an assessment of whether the building qualifies for permitted development is often more cut and dried than other issues. Where transport and highways issues are at stake, he says, the issues may be more subjective and with "more opportunity for mitigation that would allow for it to be acceptable". Whether something is in lawful use as an office or not, on the other hand, is a matter of fact, he says. "There is little else that can be said other than it does or doesn’t qualify for permitted development," he says. 

Richards says the figures show that assessing whether the scheme is permitted development or not is "absolutely fundamental" to such cases. "In my experience, councils up and down the country do not like permitted development rights and they need to be thoroughly convinced in the first instance that the building is in lawful B1a (office) use," he says. "They can be quite difficult to convince on that, especially when it is not in active use at the time of the application submission, which is the case in most instances."

For transport issues, the case often hinges on how much extra traffic the conversion will generate, says David Bainbridge, partner at consultancy Bidwells. He says the fact that office buildings often generate high numbers of trips can help developers. Conversion to residential may not necessarily increase traffic levels, he says, "especially if [the building] is in a town or city centre with good access to public transport".

Looking at other issues which have been discussed at office-to-residential appeals, an early case (DCS reference 400-005-565) ruled out the consideration of sustainability issues in prior approval application considerations, whilst a key call-in case in 2015 hinged on whether the permitted development rights contravened Article 8 of the European Convention of Human Rights (DCS reference 200-007-501) due to a neighbour’s loss of privacy from the development. The secretary of state decided that the convention was not infringed and the application was allowed. In another appeal (DCS reference 400-009-378), an inspector considered many aspects of the sustainabilty of the proposal under the transport and highways test, and - labelling the scheme as being akin to a "gulag" - dismissed the appeal.




The other two issues which are specified in the general permitted development order as applying to considerations of office-to-residential conversions - flooding and contamination - are much rarer, with only 11 having been determined on contamination issues and 13 on flooding issues. Where they have been the determining factor, appeals have tended to have a greater chance of being allowed on contamination issues (81.8 per cent allowed) rather than flooding issues, most of which have been dismissed (69.2 per cent). 

Richards says he is unsurprised by the finding. "With contamination you are dealing with sites where you are not going to be drilling into the ground," he says. "You are just converting buildings from offices which have already had people in them." Flooding, by contrast, can be a particularly sensitive issue, he says, particularly if the proposal is to convert to a more intensive use in a flood zone. Nedin adds that there may be more scope for mitigation to overcome any contamination issue than there is for flood risk.

APPEAL RATES

The statistics show contrasting results as to the proportion of appeals against refusals of these applications dismissed in various local authority areas. Excluding councils where there have been fewer than four appeals involving office-toresidential permitted development conversions, the authority with the lowest percentage of cases won is Hammersmith and Fulham Council, which as of July 2019 had not won any of the nine cases it had fought. Next came Hillingdon, which had won 13 per cent of its eight cases and Barnet which had won 17 per cent of its six cases. Two councils - Haringey and Durham - had won four out of four appeals - and Lambeth had also won a high proportion, winning 63 per cent of its eight appeals. The London Borough of Richmond-upon-Thames, which had the most appeals at 27, won 41 per cent of these cases.

Please click here to enlarge the map below. 

Please click here to enlarge the map below.


Practitioners suggest that it is difficult to pinpoint underlying factors behind these figures, but Richards suggests two potential causes for instances where councils are losing a high proportion of appeals.

"It boils down to two things - firstly, whether there’s a firm direction from senior officers or even at political level that planning officers are to really throw the book at these applications and refuse them in all possible circumstances, even if for spurious reasons," he says.

"Or it is that officers don’t quite grasp the intricacies and technicalities of the prior approval system and are taking too conservative a view on applications."

Bainbridge suggests that some prior approval applications should be determined by officers under delegated authority. "That is not to say there is no political involvement, but ultimately determinations should be based on the relevant planning considerations such as access, parking, noise, and drainage/flooding," he says. "I suspect the poor run by some local planning authorities comes down to a lack of robustness in the assessment of the notification and determination."

Asked to comment on their record in defending this type of appeal, a spokesperson for Hammersmith and Fulham Council said the authority had been successful in April 2018 in "adopting an Article 4 direction requiring all office to residential conversions to seek planning permission which allows us to exercise more control in protecting office space".

PRIOR APPROVAL RATES BY LPA

Planning has also analysed government statistics which log the numbers of prior approval applications for office-to-residential conversions, and the split between applications refused on the one hand and either approved or it being decided that prior approval was not required on the other.

The data highlights generally high levels of approval for prior notification applications for office-to-residential conversions, with 79 per cent having been approved overall.

Excluding those areas where there have been fewer than 50 prior approval applications for such schemes, the figures show that authorities with the lowest rates for either approving prior approval deciding that prior approval is not required, are the London Borough of Newham (54 per cent approved or prior approval not required), followed by Lewisham (55 per cent), Brent (56 per cent) and Watford (57 per cent). At the other end of the scale, no refusals at all were issued for such schemes in Nottingham, which had received 63 applications, whilst one local authority, Fareham Borough Council, had received 105 applications and had issued just one refusal.

Practitioners say it is difficult to draw conclusions from these figures, as the context of site characteristics varies between and within council areas. "A lot of this will depend on the sites," says Richards. "There are quite a lot of sites where they are probably ticking every box and there is no way they can be refused."

PRIOR APPROVAL APPLICATIONS

The ten authorities with the highest numbers of prior approval applications are all London boroughs, with Richmond-upon-Thames leading the way with 329, closely followed by Hammersmith and Fulham at 325. Behind these, Barnet, Lambeth, Wandsworth, Hounslow, Bromley, Ealing and Croydon have all had over 200 prior approval applications. The authority with the highest number outside the capital is Bristol with 196. Other councils outside London with 140 or more applications received are Dacorum, Southend-on-Sea, Birmingham, Reading, Brighton and Hove, Wycombe and Leeds.

At the other end of the scale, the statistics show that, so far, seven councils have received no prior approval applications for these schemes - Barrow-in- Furness, Copeland, Mansfield, Weymouth & Portland, City of London (one of the areas originally excluded from the PD right), Isles of Scilly and Redcar & Cleveland. Dartmoor National Park, North York Moors National Park and the Ebbsfleet Development Corporation also fall into this category.

The figures indicate that, generally, urban authorities in the south are most likely to be hotbeds for office-to-residential conversion activity, except where they are in heavily constrained areas, such as areas with Article 4 directions in place removing such permitted development rights.

This is likely to be explained by the supply of qualifying buildings and the residential values that would make them attractive prospects for conversion, Nedin says. Bainbridge adds that access to good public transport is "a key driver", particularly when the public transport provides good links to London.

CONTEXT

Permitted development rights for office-toresidential conversions were initially introduced in 2013. Originally titled as ‘Part 3 Class J’, the right enabled conversions from Class B1 (a) of the Use Classes Order to Class C3 residential use without a full planning application being required and subject to certain exceptions, for buildings which were in office use on 29 May 2013. The original right was set to expire in May 2016.

Conversions were subject to a prior approval procedure, whereby local planning authorities could consider the transport and highways impact of the development, as well as any contamination and flood risks.

Certain exclusions applied, including that the site was in a safety hazard area, and that the building is a listed building or scheduled monument. The initial intention of the policy was to stimulate house building, particularly on brownfield sites, according to experts. "The idea was that it would help stimulate delivery of residential accommodation," says Nedin.

In a rewrite of the general permitted development order in 2015, the right was reclassified as Part 3 Class O and, in April 2016, the right was made permanent, but the prior approval process was also extended so that councils could also consider a fourth issue - the impacts of noise from commercial premises on the intended occupiers of the development.

MHCLG OVERALL DATA

The earliest statistics held by the Ministry of Housing, Communities and Local Government (MHCLG) go back to the second quarter of 2014. They show that, during this quarter, over 1,000 prior approval applications were submitted to local authorities in England for office-to-residential permitted development conversions.

Of these, only a relatively small proportion (203) were refused permission, with 401 deemed not to need prior approval and 463 granted prior approval. The number of prior approval applications submitted remained at or just below the 1,000-perquarter mark until the final quarter of 2015, when it started to gradually decrease, a gradual fall which has continued to the current level of between 400 and 500 per quarter.

The number submitted in the first quarter of 2019 was 420, the lowest number on record and less than half the level of the 1,086 applications submitted in the third quarter of 2014, the highest level recorded.

"The easy schemes that were available at the time of the system’s introduction came forward and the opportunities were taken by many developers and freeholders who owned office buildings," says Nedin.

"And since then, in a number of places office values have risen so the difference between residential and office has narrowed - so in some places it might now be more attractive for owners to keep the buildings in office use."

The Planning Officers Society says reasons for the downward trend in the submission of prior approval applications could include "that the number of buildings which are economically viable to convert are becoming more difficult to find, and more authorities having put Article 4 Directions in place resulting in the need to make a full planning application".

Despite the decline, Bainbridge says it can still be attractive for developers who have an office building to "get a piece of paper from the council to say they can convert it into residential without affordable housing". He adds: "It is quite a bonanza, which is why the figures have been so high".


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