9m² flats, microhomes sold under Help to Buy: how office-to-flat conversions created the rise of ‘rabbit-hutch’ homes i investigates conditions at converted office blocks which can be built without getting planning permission

An investigation by i into a controversial planning exemption which allows offices to be converted into flats has found plans for studio flats as small as 9m², buildings with ventilation issues, residents concerned over the quality of conversions and microflats being sold under Help to Buy.

Permitted development rights (PDR) allow changes to be made to an existing building without planning permission. Five years ago, this was expanded by ministers to enable office buildings to be converted to housing.

Under permitted development rights, conversions do not have to meet minimum size standards of 37m² for a one bedroom, one person flat i's opinion newsletter: talking points from today Email address is invalid Email address is invalid Thank you for subscribing! Sorry, there was a problem with your subscription.

Under permitted development rights, conversions do not have to meet minimum size standards of 37m² for a one bedroom, one person flat or 61m² for a two bedroom flat. Developers can also avoid minimum standards for access to light which means some conversions have tiny windows which do not open fully or at all, leading to poor ventilation. Critics have repeatedly warned this policy is creating “the slums of the future”.

After London and Greater Manchester, West Yorkshire – which includes Bradford and Leeds – has the highest number of office to residential conversions in the country.

i has found some microflats converted under permitted development rights have been purchased using the Government’s Help to Buy scheme, a scheme which has significantly boosted house builders’ business by supporting buyers who wouldn’t otherwise be able to purchase homes with Government loans.

Permitted development rights ‘tie council’s hands’

Roughly a third of all office-to-residential conversions have occurred in London, with Croydon and Tower Hamlets seeing more than any other boroughs. In Croydon, flats have been approved under permitted developments rights which measure just 9m². Alison Butler, Croydon Council’s Cabinet Member for Homes, is frustrated by permitted development rights, which she said “tie councils’ hands”.

Under permitted development rights, Butler explained, developers only have to give a ‘prior approval’ application, “meaning we can only consider transport and highways impacts, contamination risks and flooding risks.”

The plans for 9m² studios are registered in Purley, South Croydon, where a ‘prior approval’ application is listed for two flats in 2018, followed by another for the conversion of an office into two flats this year.

“When 9m² homes were proposed in Purley, the Council had no option but to accept a change of use,” says Butler. “We were unable to do anything about refusing on size or suitability.”

Butler notes that if you look at the plans, “they haven’t placed a shower, a toilet or anything else.”

‘Psychological torture’

Research has found living in small spaces can affect inhabitants’ mental health. At four larger-scale office to residential conversions, i spoke to renters and one leasehold homeowner living in microhomes who raised concerns about their wellbeing.

At Delta Point, a 1980s office block in Croydon town centre which was once the iconic home of BT, one anonymous private tenant described the noise caused by poor sound insulation as “psychological torture”.

In 2010, Delta Point lay empty because of cuts at the telecoms giant. In 2015, it was converted into 400 rent-only flats, making it one of London’s largest office-to-residential conversions.

Externally, it still looks like offices. Reflective windows which only open part way, or not at all, cover its facade.

‘It’s hot because not all of the windows open, those that do only open a few inches’

Outside, two young men described conditions. “Rent is around £700 a month,” one said, “[which is] not cheap. My flat is small but the problem is really noise – walls are thin. You can hear everything everyone does. I don’t play music loudly but neighbours are always complaining.”

“It’s hot because not all of the windows open, those that do only open a few inches,” the other added. “Water pressure is unpredictable too. Sometimes the shower is just a trickle.”

Delta Point’s owner did not respond to i‘s requests for comment.

Down the road is Green Dragon House – another former office block built in the 1960s, underneath which once sat Croydon’s legendary Black Sheep Bar. The offices have been converted into one and two bedroom flats. Green Dragon House was converted by Inspired Homes in 2015, winning an award for ‘Most Innovative Redevelopment of an Existing Building’.

In a 2017 interview, Martin Skinner, CEO of Inspired Homes, said permitted development has been a useful building policy for developers. “Space standards mean we can’t get planning permission for new build micro schemes, so we convert offices under permitted development rights to mitigate the planning restrictions on unit sizes.”

In June 2018, Inspired sold the freehold to Ishguard limited which is ultimately controlled by the Tchenguiz Family Trust in the British Virgin Islands.

Adrina*, 35, is a leasehold homeowner at Green Dragon House. She purchased her 31m² one bedroom microflat off-plan using the Help to Buy equity loan scheme in 2016 for £285,000.

Initially, Adrina was “overjoyed” to become a homeowner after living at home for years to save. Four years on, she says it is a “nightmare” and she fears for her financial future. Problems with faulty boilers, concerns over ventilation, and prolonged uncertainty over who will pay to rectify heating issues have impacted her mental health and she was signed off work earlier this year. She is now working again.

Last year the UK experienced one of the hottest summers on record and Adrina felt like she was “living in an oven”. There are two windows on one side of her small kitchen/living space and one in her bedroom, but they are all on a latch and can only safely be opened part way. She says they were not enough to allow air to circulate, so she bought fans in an attempt to ventilate.

“You just couldn’t be in [the flat] because it was so hot. I started to feel faint and unwell.”

Then, in March this year, Green Dragon House’s boilers broke, leaving flats without heating or hot water. “There are people with children and elderly residents at the building,” Adrina says. “It was very distressing”.

After repairs organised by the management company, Warwick Estates, failed, a temporary boiler was installed in the car park. At the time of publication, that boiler was still there.

Adrina and other leasehold owners in the block are currently in a dispute as to who should pay for the costs of the boiler – leasehold homeowners, the original developer (Inspired), management company Warwick Estates or Ishguard. Residents fear they could be asked to pay costs running into thousands of pounds.

Adrina already pays Warwick Estates a service charge of £167 a month. She said this increased from £100 in January. Warwick Estates attributed this rise to “inflation”. She also pays Ishguard £300 a year in ground rent on top of her mortgage and is concerned about extra costs.

“I’m just not sure [the boilers] have ever been up to the demands of a residential building,” she says.

Adrina had her flat valued in 2018 because she wants to move on. A surveyor’s report, seen by i, values the property at £260,000, £25,000 less than she purchased it for. She says other leaseholders fear for the value of their homes and asked her not to speak out.

Inspired Homes are advertising another Croydon office to residential leasehold conversion with Help to Buy – Innova. 197 of these flats have been converted through permitted development rights.

‘I hadn’t heard the term ‘permitted development’ until I spoke to my local councillor’ – Adrina

“I hadn’t heard the term ‘permitted development’ until I spoke to my local councillor,” says Adrina. “I knew I was buying in a former office building but I didn’t know [the developer] never had to get planning permission.”

Henry Pryor, a property specialist and buying expert, told i it might be “good practice” for estate agents showing buyers around a building to tell the buyer that it was converted under permitted development rights. “However, any mortgage valuation should take this into account. It should be clear in conveyancing documentation. The real test should be whether someone actually wants to live in such a property.”

“I’m shocked they were allowed to use Help to Buy,” says Adrina. “I have a sinking feeling when I think about what I’ve bought.”

Neither Inspired Homes nor Warwick Estates responded to requests for comment.

A spokesperson for Ishguard said: “Unfortunately in developments of this nature, heating systems are often complex and the investigation involves a number of experts which takes time.”

They apologised for “the continued inconvenience”, adding: “We have instructed the property manager to investigate this as a priority.

“We are working to bring this matter to a satisfactory conclusion as quickly as possible.”

The Ministry of Housing, Communities and Local Government (MHCLG) confirmed Help to Buy can be used with office to residential conversions. The Government collects detailed data about the scheme, but a spokesperson said it does not hold information about how many office to residential permitted development conversions have been sold through Help to Buy.

A Government spokesperson added: “Under permitted development rules, 46,000 homes have been delivered in the three years to March 2018.”

“We have said we will review permitted development rights for conversion of buildings to residential use in respect of the quality standard of homes delivered.”

Pryor believes homeowners who bought permitted development conversions could be right to worry. “The underlying values could be compromised and I’m afraid that some people are going to be left with significantly reduced values.”

“Converting underused commercial properties into much-needed homes makes sense, but inevitably some corners have been cut,” he added. “For those being sold with the help of the Government’s controversial Help to Buy policy, we can now add the tax payer to the list of mugs too.”

Supporters of permitted development maintain it allows for the creation of much-needed accommodation when England faces a shortfall of around four million homes. The Government’s own new homes target is 300,000 a year by mid-2020. In 2018, developers registered just 159, 617 new homes. Only 42,120 were considered affordable.

Inflating house-building figures

But permitted development rights are inflating house-building figures. Since the expansion of this deregulation in 2013, conversions have been included in new home construction figures.

Permitted Development Rights in numbers According to Government figures, of the 217,350 homes built in 2016 to 17 – a 10 year high – only 183,570 were new build homes. 18,887 resulted from a change of use through permitted development, 37,190 were change of use between non-domestic and residential, 5,680 were conversions between houses and flats and 720 were the registration of other forms of housing such as caravans or houseboats.

Critics of the exemption also say locations of conversions are often not properly considered. This is also a key concern for Butler in Croydon, where landmarks like the Black Sheep are long gone and once busy offices are now homes.

“Like the majority of London boroughs, we are in desperate need of new homes but converting old offices with a complete lack of accountability and no vision for an area means vital employment space can easily be lost, changing an area forever,” she said. “When profit is the only motive, resulting in cramming in as many units as possible, permitted development was bound to create the slums of the future.”

In April this year, Shadow Housing Secretary John Healey vowed Labour would scrap Permitted Development, saying it was allowing for the creation of “slum-like, rabbit hutch” flats at the expense of high quality, low-cost housing.



Sarah Jones, Labour MP for Croydon, who is assisting residents at Green Dragon House told i: “Thousands of my constituents in permitted development blocks were sold a lie, with properties which simply aren’t fit for purpose. I’m seeing this housing issue coming up more and more in my casework.”

A spokesman for Croydon Council said: “The council has been concerned with permitted development rights since it was introduced, as it has restricted our ability to secure planning obligations such as infrastructure improvements and affordable housing. Croydon Council is committed to providing new, affordable homes for local residents, but this cannot be at any cost.”

*names have been changed to protect identities