Less than 6% of the homes approved through permitted development rights in major London schemes are being built – and the deadline for completion is looming.
Some 120 office-to-residential conversion schemes of 20 flats or more have been given the go-ahead in the capital, but according to figures compiled for Estates Gazette by JLL, work has started on fewer than 10.
With a deadline to have completed any scheme permitted under the rights by May 2016, the lack of activity by developers has raised questions over how the policy is really being used and how many homes it will deliver.
The 10 schemes started account for 347 homes of a potential 6,088 permitted through all 120 large schemes.
JLL planning and development director Mark Connell said: “The statistics might show that lots of people are submitting notifications but in reality very few homes are being delivered.
“It is clear the rules are being used to establish a fallback position for residential use in future discussions with councils.”
In some cases developers have not begun work on large conversion schemes because office tenants’ leases have yet to expire, highlighting the fact that many of the buildings being targeted for conversion are still in use as offices.
Sir Edward Lister, deputy mayor for planning, said: “The mayor has long argued that this policy is counterproductive in London as it undermines perfectly viable office space and makes it hard for businesses to compete with residential house prices.”
Critics of the policy have repeatedly highlighted that large office buildings may not be appropriate for conversion to good quality homes.
But Hogan Lovells partner Claire Dutch said many developers that have issued PDR notifications “may not have any intention of completing conversions”.
She added: “Once they have development rights they can approach councils and say ‘we could convert these offices to residential with no affordable housing or you could give us permission to build a new development, with low affordable housing. I think that is why we are not seeing the influx of housing that was expected.”
The research comes as the industry awaits the government’s response to a recently closed consultation on extending permitted development rights and removing some exemptions.
Lister added: “Plans to change the regulations and make it possible for valuable office space in London’s most important business districts to be converted into homes would compromise both London and the UK’s future economic growth.”
Planning and housing minister Brandon Lewis said: “This survey shows that the government’s change of use reforms have the potential to provide badly needed homes, especially in London where there is a particularly acute need for more housing. Our reforms will help promote brownfield regeneration, protect the green belt and increase housing supply at no cost to the taxpayer.
“We are currently consulting on extending the time for completion for developments with prior approval, and we are also taking steps to speed up the time it takes to turn homes with planning permissions into starts.”
