B1 commercial property will be turned into C3 residential sites without any planning permission, once full government legislation is in place.
Communities secretary Eric Pickles has signed a development right which will last three years and allow councils to ask for exemption. Local authorities will be able to convert derelict offices into residential housing without even having to seek approval. Boroughs of Chelsea, Kensington and ten boroughs in the Central Activity Zone have already asked for exemption.
There has been a large difference in the value of commercial and residential property in recent years, especially in the capital city, and a major oversupply of office space; both of which have encouraged this move.
In Westminster, residential prices have increased by a mammoth 350 per cent in the past 20 years, whilst office space in the West End has only seen a 150 per cent rise. The gap between the two is expected to rise even more in the next five years and so many believe that converting will greatly benefit both property owners and investors.
Outside of the capital city, developers are a bit more hesitant in conversions due to the belief that residential properties should not be the centrepiece of a town centre. With such a strong oversupply of offices, there have been calls for more retail space rather than commercial and residential properties.
There are a series of office blocks that will not be able to be converted under this new legislation because not only are their floor plates too deep for flats but their windows, insulation and balconies will all have to be upgraded; all of which will require planning permission. Another factor to consider is location, as nearby restaurants and takeaways may prevent offices from being converted.