COMMERCIAL
would be eminently sensible, but the proposed changes wouldn’t achieve this. Environmental issues also need to be
considered. What about parking, or the availability of services such as retail, schools, and health centres? Guy Passey points out that this isn’t an issue in central London, even parking is no longer an issue, since many residential developments now exclude any right to parking spaces as a condition of the planning permission. (On the other hand, he says, a bike store on the ground floor is becoming a standard requirement.) And of course the services are all there already. But moving to suburban locations, such
as ring road business parks, conversions might find this more of a problem. Philip Stewardson warns that in some locations, noisy loading bays and heavy HGV traffic nearby might preclude residential development, while decontamination can also be a problem. Worse still, decontamination costs are extremely difficult to predict. “You have no idea at
A large pub site purchased with beer
garden, car park and large area of wasteland. The redevelopment was carried out in four phases:
• •
Convert the existing building into six flats, extend over the flat roof to create a seventh.
Obtain planning permission for four
‘clustering’ effect that makes the City and similar business districts so successful. Guy Passey says, “That’s a fair point to
The government hasn’t just missed the boat, it’s mised
the point.’ MARK & PHILIP STEWARDSON
all till you get some ground investigations done,” he says. Perhaps the strongest argument against
the changes, though, is that they are an overreaction to a temporary blip in the market. Peter Rees, planning officer for the City of London, warns that easier conversion could exacerbate the cyclicality of the market. “The cyclical nature of the property
industry means that if developers were to turn offices into residential blocks when times were tough, the City’s ability to attract and house new firms when market conditions improved would be seriously diminished,” he says. This could dilute the concentration of offices, particularly the types of units favoured by smaller and medium sized firms, and could damage the
34 APRIL 2012 PROPERTYdrum
make. Once the building has been converted, that building has effectively gone from commercial use”, selling off individual leasehold flats within a larger building partitions its ownership and makes it impossible to reunify it. Philip Stewardson also raises the spectre of businesses being priced out of the market for premises. “Change of use possibilities would push the value of land up,” he says, and asks “would you then get owners of commercial sites forcing businesses out to get a vacant site that can be flattened and redeveloped?” Some of these issues could be overcome
by safeguards such as property having to be vacant for at least a year before change of use became automatic, as Alex Morton suggests. He also believes conditions could be imposed where commercial property is scarce, a “last shop in the village” style provision. But Guy Passey points out that councils
currently often attach conditions to change of use permissions, which give them a great deal of leeway in controlling the standard and even the look of conversions. They would lose this ability under the proposed regulations, so there may be unintended negative consequences from a relaxation of policy. “Councils will have to revisit their planning policy,” he warns, “otherwise it will be uncontrollable.”
• •
STEWARDSON DEVELOPMENTS CASE STUDY The Loving Lamb Public House. Netherton. Dudley.
It’s planning, extension, conversion and some new build.
houses on the beer garden, this site was then sold.
Re-develop the wasteland to a gated private car park with 14 parking spaces.
Obtain planning consent for two 3-bed link-detached houses on the car park, these were then built and added to the Stewardson rental portfolio.
IMPACT ON AGENTS The proposed change may not be all good news for residential agents, either. If the supply of residential land is expanded, economic theory would naturally expect prices to fall. Alex Morton says, “At present, we create higher housing costs and lower costs for offices and industrial property because our planning system is reluctant to allow change of use.” That could unwind if the system changes, and might well involve lower house prices over the medium term. The government may actually have
missed the boat. Philip Stewardson feels commercial property prices have further to fall, so he’s looking mainly at buying residential space in need of redevelopment. One particularly nice deal was buying a house that had been used as a cannabis factory. That needed a lot of work, the wiring and much of the fabric had been almost destroyed by the high humidity, but was a profitable project for his firm. And he says the government hasn’t just
missed the boat, it’s missed the point. It’s not planning laws that stop developers from building houses; it’s finance. “There are so many building plots that
have got consent and could start tomorrow,” he says. “Even housing associations aren’t building now, and if as ‘non-profits’ they can’t make the numbers add up, how can anyone else?”
Do you have any views to share?
www.propertydrum.com/articles/conversions
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