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Case studies

Examples of what permitted development rights for offices means in boroughs across London.

 

Richmond upon thames

Richmond-upon-Thames has received by some distance the highest number of prior approval applications of any London borough, with 360 applications having been received by March 2015. The borough estimates that it has lost around 20 per cent of the office space in its area through the policy, the equivalent of around 57,000sq m of office space to be converted to 693 residential units. The borough estimates that these conversions will displace around 3,150 local jobs. It has also made it more difficult for the local voluntary sector to secure suitable accommodation in the area.

The introduction of permitted development rights has reduced opportunities for business development in the borough, particularly for small IT firms which the borough has been seeking to promote. One such company was required to place its office equipment into storage and to make three members of staff redundant while it sought new accommodation, owing to the landlord’s desire to convert its long-standing premises into one-bedroom flats.

A significant proportion of the prior approval applications received are for office spaces of 1,000 and 2,500 sq m, for conversion to residential schemes of between 10 and 25 dwellings. These are the kind of spaces which the borough had been using to promote itself as a location for smaller firms in the IT sector and which have now been significantly diminished by office to residential conversions. This has had countervailing impacts on rents (which have increased as accommodation has become scarcer) and on

the viability of the office market as small businesses begin to look elsewhere for more widespread and affordable accommodation.

Barnet

The owner of the Premier House block in Edgware town centre sought prior approval for conversion of around 7000 sq m into 112 units. Once prior approval had been granted, 100 businesses were immediately given notice to quit. The borough considered it unnecessary for businesses to be evicted so soon as there was little evidence of activity in subsequent months, though the conversion is now being implemented.

The site is considered to be strategically important to the economy of Edgware and Barnet borough, and the borough had worked with the owners of such sites to develop a Town Centre Strategy in June 2013. The borough has also introduced a Town Team in Edgware to support development of the local economy. The loss of key office accommodation undermines these objectives.

Barnet has also been required to grant prior approval to nine other schemes of over 1000 sq m. Overall, it has been required to approve 109 prior approval applications, including a total of 40 fully occupied office spaces – more than any other London borough. This amounts to a total loss of at least 53,000 sq m of office accommodation.

Croydon

The London Borough of Croydon has been required to grant prior approval for the conversion of over 99,000 sq m of office space, to be converted to a total of 1,705 residential units if all schemes are completed. If these units had gone through the planning system it is likely they would have supported the delivery of between 256 and 853 affordable housing units alone.

The vast majority of the prior approval schemes to have been approved in Croydon do not meet the floorspace requirements set out in the London Plan and almost none have any provision for private or communal amenity space.

Proposed schemes include:

  • Croydon House, with 34 very small units (the smallest being just 13.4 sq m) and no affordable housing
  • Cygnet House, a wholly occupied office block to be converted to 71 units of between 20 and 25 sq m with no outdoor amenity space
  • Brighton Road, an office block in a shopping parade with units proposed at around 16 sq m

Islington

In the first 18 months following the introduction of permitted development rights for office to residential conversions, 75 applications for prior approval were granted by the London Borough of Islington for a total of just over 700 residential units. Over two thirds of residential units to be created are studio and one-bedroom flats, with no ability for the borough to secure affordable housing.

Prior approvals granted to date are likely to result in a loss of 53,000 sq m of office space with the ability to accommodate around 4,500 jobs. The borough estimates that over half of the floorspace for which prior approval was granted was occupied.

Prior to the introduction of permitted development rights, applications were received for the conversion of offices to residential accommodation amounting to an average of 45 units per year. The borough believes that the principal driver behind the increase since May 2013 has been the removal of any ability for it to seek planning obligations from developers, in particular contributions to affordable housing. Cabinet member for housing James Murray said, “small businesses and charities have already been evicted from their offices to make way for bedsits.”

Major schemes to have been approved through permitted development rights in Islington include

  • Archway Tower, a conversion to 118 private rented units described by the council as “sub-standard bedsits” with no outside accommodation. As the council was not able to apply local plan policies, it was not able to negotiate with the developer in relation to its 50 per cent target for affordable housing on new developments.
  • Whittington House, a fully occupied office building on Holloway Road, one of the first to secure approval for office-to-residential conversion through permitted development rights. The businesses and charities occupying the building, including a deaf charity, had signed new leases eight months before they were given notice to leave, having previously been advised that the building was no longer on the market. The conversion resulted in the development of 39 flats, which could have secured an equivalent contribution to approximately 19 new affordable homes through the planning system. Most of the businesses who were evicted have left the borough.

Camden

The London Borough of Camden has received a total of 195 prior approval applications up to the end of February 2015, of which it was required to grant approval to 114. The approvals could lead to the loss of approximately 57,000 sq m of floorspace.

A previous study commissioned by the borough in summer 2014 estimated that prior approvals up to that date had resulted in the loss of approximately 2,570 jobs or over 12 per cent of the total in the study area.

The borough is a major employment centre and is forecast to see an increase in demand for office floorspace of around 615,000sq m between 2006 and 2026. Given this demand, a consequential effect of the permitted development rights is also likely to be increased rents for businesses.

Loss of office space in the borough includes Linton House, Highgate Road - a former factory hosting a range of businesses including architects, a dance school and film businesses. Approval was granted for 54 new residential dwellings with the loss of 3,900 sq m of occupied office space. The secretary of Kentish Town Neighbourhood Forum noted that such spaces were being lost as office accommodation owing to the vast differential in value between office and residential uses in the area.

Lambeth

The Waterloo and Vauxhall areas of Lambeth are currently exempt from permitted development rights as they fall within the Central Activities Zone (CAZ). Lambeth applied for similar exemptions for its key industrial and business areas and major town centres, but these were refused.

Since the temporary permitted development rights were introduced in May 2013, some 168 prior approval applications have been received for the non-CAZ part of Lambeth, resulting in the potential loss of over 40,000m2 employment floor space for the creation of 610 new residential units. The council had no control over the quality of this new accommodation.

Along with the lost employment space, Lambeth has also foregone potential for approximately 150 affordable housing units that it was unable to secure through the prior approval process.

If the CAZ exemption were to be removed, the borough risks an even more severe loss of office accommodation. The CAZ in Lambeth accounts for 28% of all existing B1a office floorspace in the borough, which equates to over 13,300 jobs. Waterloo alone contains over half of Lambeth’s current jobs and is a major office location.

Much of the forecast growth in jobs in the borough will also be in sectors that require B1a office floorspace. The council’s emerging Employment Land Review 2015 suggests that Lambeth will require an additional 174,000m2 B1 floorspace between 2013 and 2031. Much of this will be needed in the CAZ. Vauxhall is part of the Nine Elms Battersea Opportunity Area and is the largest area of redevelopment in Central London, expected to deliver some 22,000 new jobs overall. Most of these will be office-based jobs at risk under the loss of the CAZ exemption.