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Office to residential planning changes

‘The FT reports that this week the government could push through changes to the planning system to allow nationwide conversions of offices to housing.

The rule change is intended to encourage building projects in and around UK cities as developers try to cash in on the growing gap between office and house prices.

The value of office developments fell sharply at the start of the financial crisis, but while London has bounced back, regional office buildings and older properties have been the worst affected.

According to data from Jones Lang LaSalle, office vacancy rates in Manchester, Leeds and Bristol are all at about 10% of total stock.

In Birmingham the figure is 17%, while in the Thames Valley it has risen to 21.2%. Daniel Levy, a real estate lawyer at Mishcon de Reya said: “There is already a massive disparity between demand for office space and housing, so you are likely to see a lot of people take advantage, it could have a massive effect on values”.’

Source: Financial Times, The Daily Telegraph

Myfanwy Neville

Partner, Property and Construction

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