In a statement last month, the Secretary for State for Levelling Up, Housing and Communities announced an extension of the Permitted Development Rights planning measure. This was originally brought in a decade ago and saw millions of square feet of vacant offices converted into homes. Under this new policy, getting planning permission to turn vacant shops, takeaway restaurants, betting shops et al into homes would be similarly straightforward.
However, one of the potential fault lines in this strategy is the configuration of the properties in question.
Previously, the majority of old offices that were turned into homes were tower blocks of varying sizes. As such, they were relatively straightforward to convert into flats, and the multiplicity of units they created enabled the developments to be viable.
When looking at converting shops to residential, it’s hard to benefit from the same dynamics. Their lay-out is often not very amenable to conversion and the pattern of multi-ownership across town centres means that doing developments of any scale could involve painstaking site acquisitions.
Encouragingly however, many conversions/redevelopments are already taking place. A cursory look at the flow of High Street assets which pass through UK property auctions shows that those which are snapped up most quickly often have scope for whole or partial residential conversion.
Of course, the reason that these properties are in demand is because of their economic viability and prime locations: two key factors that attracts considerable attention from would-be investors. And this touches on the other major fault line in Gove’s plan. A huge number of the empty properties he has in mind are in areas of economic deprivation where the cost-return equation would simply not make conversion viable.
So, whilst a more congenial planning system would be welcome to get the conversion ball rolling it would have to be – in many UK locations – supplemented by some kind of financial support to create viability. Perhaps a partial or whole VAT exemption on necessary conversion works?
At a time like this when the Government is as strapped for cash as most of the population, it may be hard to expect the Treasury to forego any tax revenues. But if there is real intent to address the problems of our urban areas then there needs to be fiscal encouragement which can be more than repaid through increased economic vitality and enhanced environments.