London office-to-residential conversion starts rocketed in the 12 months to May 2015, from 331 in May 2014 to 5,354 a year later, a 16-fold increase, according to EGi London Residential Research.
Croydon managed to account for 31% of all new starts in the period, owing to the majority of its office stock being well suited to residential conversion and the relative affordability of the borough.
However, unlike most conversions across London, the borough has also seen the highest number of conversion to private rental uses. While 63% of stock outside of Croydon is being developed for private sale, in Croydon 78% of units are being developed for the rental market.
The report said that office-to-residential conversions in the borough lend themselves to the rental market because the stock is older, smaller and offers challenging configurations.
The research also revealed that Westminster, despite its almost total exemption, has still seen record numbers of office-to-residential conversions – albeit through the regular planning processes.
Over a third of office-to-residential starts in the borough over the past 10 years have occurred since May 2013, due to the profitability of the residential market.
The research said that property development rights are merely the course of least resistance, but if that route is denied in the inner boroughs, then more costly routes will be taken, unless new barriers to conversion are raised by the boroughs.
