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London, 19 October 2015 – JLL Residential Research reveals that an estimated 8,000 prior approvals were secured in the first two years after office-to-residential permitted development rights were introduced in May 2013. If all of these were implemented it would create 60,000 homes.
However, prior approvals have not always translated to direct delivery with many developers using PDR as a bargaining chip to open up a discussion with a Local Planning Authority over delivering a more suitable office-to-residential scheme. It is estimated that only between 5,000-10,000 PDR units were delivered directly from a prior approval in the first two years of the policy.
JLL’s research using data from DCLG and local planning authorities shows a heavy weighting in the use of PDR towards London and the South East which account for nearly two thirds of all prior approvals.
The total number of homes proposed from PDR in London in schemes of all sizes totals 22,500 homes across circa 3,500 schemes. Of those prior approvals just under 17,000 homes are proposed in 650 schemes of five units or more.
Outside London just under 38,000 units have been proposed through 4,500 prior approvals.
JLL’s research also revealed that the vast majority of homes proposed through PDR are studios, one or two bedroom apartments while many schemes are in the control of new entrants to the UK residential property market. The likes of non-developer property owners have been attracted to the use of PDR, over full scale planning applications, because it is quicker and cheaper and provides more certainty of approval and therefore less risk.
JLL Residential Research Associate Director Nick Whitten says: “The principle of using permitted development rights (PDR’s) for the change of use from office to residential is, where appropriate, fundamentally beneficial. Tired, old office stock can be converted into housing breathing new life into an area. Critics suggest that the policy encourages the loss of office space, particularly for SMEs and the creative industries. However, in many cases, the offices that are being converted are no longer fit for purpose or are unviable to refurbish due to low rents.
“The policy has enabled new entrants to come into the residential market, diversifying the housing offer and encouraging smaller developers to take on schemes. The prior approval process is quicker and cheaper than a full scale planning application, but most importantly it provides more certainty of approval, and therefore less risk. For non-developer owners, or smaller developers, this opens up opportunities.
“However, with local authorities under increasing financial pressure, JLL suggests that there should be an increase in the fee to reflect the work involved in the prior approval process. It is too early to ascertain whether concerns expressed about the downsides of PDR, such as loss of commercial space, are having a material impact on the ground. We would suggest close monitoring of the effects going forward.”
Notes to Editors:
The Government has announced that office-to-residential permitted development rights (PDR) have become a permanent fixture of the planning system. PDR which permits the conversion of vacant offices to residential units without the need for full planning permission was introduced in May 2013 and was previously due to expire in May 2016. There are currently a number of areas in 17 local authorities that are exempt from PDR consisting of individual buildings, roads or zones. Those areas that are currently exempt from the office to residential PDR will have until May 2019 to make an Article 4 direction if they wish to continue being exempt. The new permanent PDR allows for demolition of offices and new build as residential use, subject to limitations and prior approval by the local planning authority. The Government has said it will provide further details in due course on this. In addition, new permitted development rights will enable the change of use of light industrial buildings and launderettes to new homes.
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