The Square Mile and other leading business districts should be safeguarded, or could lose their ability to attract new firms and investment, according to Peter Rees, city planning officer for the Corporation of London.
‘While the Government's ambition of supporting economic growth and increasing housing stocks is laudable, the Government's consultation on relaxing planning laws for the conversion of office space to residential properties could have a detrimental impact not only on the City of London but on business districts throughout the UK,’ he told an event organised by the British Property Federation.
‘The cyclical nature of the property industry means that if developers were to turn offices into residential blocks when times were tough, the City's ability to attract and house new firms when market conditions improved would be seriously diminished,’ he explained.
‘Such changes to planning law could dilute the concentration of offices, particularly the kind of units favoured by SMEs and the agglomeration of firms that make the Square Mile a world class business environment that continues to attract firms of all sizes from around the world,’ he added.
The Institute for Public Policy Research recently estimated that Britain faces a shortfall of 750,000 homes by 2025, with house building at its lowest peacetime level since 1923.
Chancellor George Osborne announced in the March Budget that he wants to slash much of the red tape prohibiting converting commercial property into homes, with Government suggesting if all long term unoccupied office space was converted, 250,000 homes could be delivered.
‘The Government's consultation on the proposed relaxation on the planning rules to allow a change of use by way of Permitted Development from offices and possibly general industrial and storage and distribution to residential use has come as a pleasant surprise to the residential investment sector,’ said Andrew Stanford, chair of the British Property Federation residential committee.
‘Coupled with the desperate need to increase housing supply, particularly in London and the South East, the proposal is to be welcomed, albeit with caution in key areas such as the City of London where it is likely that adjustments to the policy will be required,’ he added.
