The Government’s scheme to increase the housing supply by making it easier to convert offices into homes is coming under pressure as central London councils opt out.
Conversions can be carried out under new planning rules without special change-of-use permission, and developers have snapped up thousands of square feet of office space. Centre Point, in New Oxford Street, is to become 82 flats, and swathes of the Victoria Embankment are launching as new homes.
But almost half of the boroughs, including Westminster, Kensington & Chelsea, the City, Camden and Southwark, have opted out in full or in part, fearing the lack of office space will mean fewer local job opportunities.
In outer London, Hackney, Tower Hamlets, Merton, Newham and Wandsworth have all been granted opt out rights.
Islington Council, which had hoped for a borough-wide ban but was granted the right to opt out only in key areas close to the City, has revealed it is seeking a judicial review of the contentious policy which could see it scrapped altogether. Richmond Council - which was refused permission to opt out - is expected to throw its weight behind the legal challenge.
Councillor James Murray, Islington’s housing and development chief, fears the new rules will result in a “reckless free for all” as developers cash in, damaging the borough's economy and costing some 6,000 jobs.
There’s a real danger that small offices across the borough will be lost to private housing, and tower blocks will have as many flats as possible crammed into them,” he warned. “The threat is not just to empty office accommodation in Islington: the high value of residential property means that office-owners may be tempted to end the leases of existing businesses so the offices can be converted.
“This will push up office rents, and price out small businesses or charities, and having fewer businesses means fewer jobs.”
Peter Rees, chief planner at the City of London, fears unrestrained loss of office space could destroy the international reputation of the Square Mile - and is deeply cynical about the type of owners attracted to the area, pointing out that homes in the area are usually too expensive for average Londoners. “They are just boxes for gangster cash – if you go around in the evening the lights are not on,” he said.
Communities secretary Eric Pickles said the new rules would cut bureaucracy and make it easier for “outdated, redundant or underused offices” to be turned into much-needed homes.
However Councillor Robert Davies, deputy leader of Westminster Council, said it was crucial councils keep control the loss off office space. “This kind of residential conversion will also only lead to expensive homes, not affordable homes, at a cost to the business community – which I think negates exactly what the Government is trying to achieve in terms of housing and growth,” he said.
The news comes as the Government forges ahead with equally controversial plans to relax rules on converting shops into flats. A consultation into the proposal was launched in early July 2013.