Even the most staunch Conservatives are against it. So why is a disastrous new part of the housing and planning bill being made permanent?

The phrases “warehouse living” and “home office” might take on a whole new meaning if the UK government gets its way. Offices, launderettes and industrial units could all become places to live in according to the government’s latest solution to the housing crisis, heralded as another “planning shakeup” to breathe life into unused buildings.

But in a bid to solve one crisis, the new housing and planning bill is paving the way for another. Critics fear it will simply accelerate the hollowing out of London, speeding up the process of suburbanisation that is fast leaving the capital with no affordable places to work.

“Very soon we will wake up and realise we have two crises on our hands,” says Mark Brearley, professor at the Cass Cities unit of London Metropolitan University. “People understand the seemingly insoluble problem that we can’t produce enough housing, but now it’s being joined by the fact that space for London’s economic and civic life is being relentlessly squeezed out.”

The new bill will simply accelerate the hollowing out of London

The proposed change in legislation will extend “permitted development” rights, allowing offices and light-industrial buildings to be converted into housing without the need for planning permission nor the usual obligations to provide affordable housing. First introduced as a temporary measure in 2013 to give housebuilding numbers a quick boost, and originally due to expire in May 2016, the new legislation would see the rule made permanent. Given that a building can be worth three times more as housing than as an office, many fear it will lead to wholesale evictions of small businesses and the loss of workspace, with London and the south-east facing the brunt, where house prices are so high.

“The government says it is targeting vacant or underused office space,” says Michael Bach, chair of the planning committee of the London Forum of Amenity and Civic Societies. “But the planning system isn’t capable of targeting whether buildings are in use or not. Instead, this opens the door to obliterating occupied, fully functioning office space. For developers, if you don’t have to provide affordable housing or meet housing standards, it’s a no-brainer. Spaces for small businesses and voluntary groups will be wiped out. As a long-term measure, it is disastrous for London.”

The move has been welcomed by the British Property Federation, which says the rule will be “a useful tool in breathing life back into underused commercial space”. “Any trip through our suburbs soon exposes redundant office space that, with the best will in the world, is never going to be brought back into commercial use,” says chief executive Melanie Leech. “For such situations, this policy is helpful.”

Facebook Twitter Pinterest The legislation targets office buildings whether they are occupied or not. Photograph: Oli Scarff/Getty Images

But figures for permissions granted so far prove that it is not focused on redundant buildings alone, and that many occupied offices have been vacated without providing new homes. A report by London Councils, the cross-party organisation that represents the capital’s local authorities, found that to April this year, over 830,000 sq m of office floorspace has been approved for conversion since the rule was introduced in 2013, including permission to convert over 100,000 sq m of fully occupied office space.

The report warns that the rule will result in a huge loss of potential affordable housing, too. Figures collected from London boroughs indicate that approval has been granted for at least 7,000 dwellings in schemes of 10 or more units, which would ordinarily support as many as 1,000 affordable homes. But under permitted development rights, there is no such requirement. This is likely to result in more substandard private flats carved out of buildings never intended to be used as homes, and which can duck housing regulations.

“It seriously undermines the ability to create decent homes,” says Kate Henderson, chief executive of the Town and Country Planning Association. “The government says it is committed to localism and that it wants planning to give power to local communities. But this announcement means local communities will have even less say over how their neighbourhoods are developed.”

London’s diverse economy is being stripped out. The city is eating itself – and that’s not good Mark Brearley

When the legislation was introduced, half of the local authorities in the UK asked for exemption, which should have been a warning sign that maybe it wasn’t such a great idea. In the end, only 5% of councils were allowed to opt out, including London’s Central Activities Zone – an area that includes the City and most of Westminster. The places that will be hardest hit are in outer London, where crucial space for small enterprises and manufacturing will be forced to make way for the march of luxury flats.

“Outside the very centre of London, the city is suburbanising rapidly,” says Brearley. “Paradoxically, it is getting denser, but the economy of these places is moving quickly towards only servicing the resident population. The space for London’s more diverse, footloose economy – from artists’ studios to tech startups and light industry – is being stripped out. The city is eating itself and that’s not good.”

The north London borough of Barnet has been required to approve more than 100 office-to-residential conversions, including 40 fully occupied offices – more than any other borough. It includes the conversion of Premier House, a 7,000 sq m office block, into 112 flats – which saw the eviction of 100 local businesses.

Facebook Twitter Pinterest Converting offices into homes will lead to a loss of affordable housing and depletion of local businesses. Photograph: Martin Godwin

On the other side of the city, Croydon has been forced to grant approval for the conversion of 99,000 sq m of office space to around 1,700 residential units. If these schemes had gone through the planning system, that figure would have led to as many as 850 affordable housing units.

Nicky Gavron, Labour’s London Assembly planning spokesperson, has been a vocal critic of permitted development, describing the rule as “a reckless measure which sacrifices jobs” and pressing Boris Johnson in mayor’s questions. “It results in the wrong types of homes in the wrong locations, and lets developers off the hook,” she says. “Converted housing does not have to meet affordability, environmental or disability standards set by local authorities. And even where property owners don’t convert, they use the increased land value to drive up rents, forcing businesses to close or to leave London.”

We've seen businesses forced out by hard-faced men in search of a quick buck and the first flight to the Bahamas Lord True

Over in the conversion industry, business is booming. “Sites wanted” posters have appeared all over the city, advertising “big fees for intros to landowners”.

“The interest since this announcement has been phenomenal,” says Tony Wood, project manager at Acorn Commercial property agents. “A lot of buildings that would have missed the deadline are now back on track, from warehouses to old offices, particularly now that they can be demolished and rebuilt.” The new legislation goes beyond existing conversion rights, allowing developers to raze buildings and build new homes without planning permission – sparking fears of an imminent deluge of unregulated development.



The Tory policy has faced a barrage of criticism from even its usual allies. Conservative-led Richmond says it has lost 24% of its office space as a result of the rule. Its council leader, Lord True, has come out vociferously against the proposed legislation. “Yet again Whitehall dogmatists have failed to listen to local people and their elected representatives,” he says. “We have seen businesses forced out of their premises by hard-faced men in search of a quick buck and the first flight to the Bahamas. Voluntary bodies, who so often rent unused office space, lose out as well. That is a disgrace.”

By further relaxing planning rules in the aim of “removing red tape”, the government has again got the wrong target in its sights. There are currently existing permissions for around 270,000 homes that developers are just sitting on.

“What about some real radical thinking,” Lord True says, “like a right for local councils to require developers sitting on land banks to get on with the job? Or a right for local councils to apply for and execute development on brown land held by dozy government departments and obstructionist public bodies?”

The sad reality is that the government will only take notice once the suffocation of London’s dynamic, plural economy – the thing that makes it so successful – is finally complete, once the space it needs to thrive has been utterly hounded from the city. By that time, it will be too late.