An announcement on the extension of office-to-residential development rights is to be delayed until after the summer parliamentary recess.
The current scheme, which allows offices to be converted to residential without planning permission and affordable housing contributions, is set to expire in May 2016.
Clarification on the status of PDR, in the form of a statutory instrument to extend the scheme, is needed by developers because they now have fewer than 11 months to convert sites before the deadline.
A CLG spokesman said: “We are considering whether to make changes to or extend the right to change of use from office to residential buildings. In doing so we recognise the importance of protecting key strategic economic areas. We will make an announcement in due course.”
PDR has led to the disappearance of an office market larger than that of Reading, Berkshire, according to research from Lambert Smith Hampton. Councils have expressed concerns over the attendant loss of employment space.
However, the recent surge in UK office rents around has led some developers to conclude that schemes could be more profitable if the remained as offices.
Alastair Perks, senior director of central London development at CBRE, said: “With office supply at such low levels and take up and rents still rising with continuing business expansion, we are seeing developments in London and other core markets turning away from permitted development conversions and remaining as offices – on which investors believe they can find stronger returns.”
Questions also remain regarding the status of schemes in progress at the May deadline, and the definition of occupancy.
Marnix Elsenaar, head of planning at Addleshaw Goddard, said: “The continued uncertainty surrounding the future of permitted development rights is causing headaches for developers, who are seeking clarity on what stage developments need to be at by May 2016 to ensure compliance with PDR as it currently stands.”
