Friday, 3 June 2016

Residential conversion of offices in London – the Mayor wades in.

As readers are well aware, the permitted development right granted by Class O of Part 3 in the Second Schedule to the GPDO, which allows the residential conversion of office buildings (subject to prior approval) has been bitterly opposed by several London Boroughs. An attempted legal challenge to this provision got short shrift in the High Court, and LPAs were driven back on the expedient of making Article 4 directions in those areas that were not specifically exempted by the GPDO itself. However, if an LPA wishes to avoid potentially substantial compensation claims, it must give not less than 12 months’ notice of the Article 4 Direction.

The protected areas (which are not confined to London, although most of them are to be found in the capital) will cease to be protected in 2019. LPAs in those areas therefore have almost three years in which to get Article 4 Directions in place, although as the London Borough of Islington discovered, blanket Article 4 directions are liable to be struck down by the Secretary of State, using his default powers under that article. Any such directions will therefore have to be selective, and must be justifiable on objective criteria. Any direction that is too wide in its application is liable to suffer the Secretary of State’ s veto.

However, the new Mayor of London (Sadiq Khan) issued a press release today announcing that he will put new measures in place to help protect and expand office space for small businesses, start-ups and entrepreneurs in London. Sadiq Khan made the announcement following the publication of new City Hall figures which show that since 2013, over 1.47 million square metres of office space could have already been converted into residential units in London using the Government’s permitted development rights, “which allow uncontrolled office-to-residential developments”. This means space for nearly 94,000 jobs in London could be lost through this process (the press release says).

When it comes to specifics, it is clear that the Mayor has very little power to prevent the operation of Class O. Amending the London Plan “so that there is stronger protection for small businesses and start-up workspace” will not in fact prevent residential conversions under Class O, nor will it enable LPAs in London to refuse prior approval of these conversions. The statement simply says, rather weakly, that the Mayor will “work with the Government on changes to permitted development rights”. I rather doubt whether he will get a very sympathetic hearing from De-CloG ministers.

Sadiq Khan is quoted as saying: "These new figures lay bare the impact that the Government’s misguided policies are having on space for business in London. Of course we need new homes, but this does not need to be at the expense of the space we need for the businesses that provide our jobs and drive our prosperity. Space which is genuinely surplus to commercial needs should be identified authoritatively and its release carefully managed so that it does not undermine local business.” (One can almost hear the collective yawn from Marsham Street.)

What Khan would like to do (although, as I have pointed out above, it will not in practice prevent the exercise of PD rights under the GPDO) is to change the London Plan “in order to protect viable business space and to create new start-up spaces in housing developments”. He asserts that there needs to be more control over where office space can be converted to residential use. Well, dream on, Sadiq.

I am sorry to be so ‘down’ on London’s newly elected Mayor, especially since if I lived in London I would undoubtedly have voted for him (and I rejoiced at his replacement of the ghastly Boris, and the defeat of a very divisive and equally right-wing candidate who had been put up to replace him). But politicians of all hues must learn not to promise what it is not within their power to deliver.

It seems to me that local politicians are, in any event, all too often a long way behind the curve in recognising changing needs and demands for various types of accommodation, and this now applies to office space in the same way as it has done for some years to industrial land, not to mention retail premises. Time and again we still see local plans that seek to protect employment land, for which there is no longer any need or demand, and which seek to ‘protect the vitality and viability’ of shopping areas which have been dying on their feet for years, as a result of changing patterns of retail activity combined with developing technology.

Studies have clearly shown a steadily reducing demand for office space, due to different patterns of working, again driven by technology – a trend that will only accelerate. The offices that Sadiq Khan and other local politicians are so keen to protect simply aren’t going to be needed in the future. Policies that seek to resist the redevelopment of industrial land and office premises, and changes of use away from retail in designated shopping areas, will only serve to create empty and increasingly derelict sites, when those sites could be making a positive economic contribution if redeveloped for other purposes.

Whether this was in the government’s thinking in using the GPDO as the vehicle for liberalising the planning regime to facilitate changes of use in a way that would prevent local planning authorities from resisting or obstructing such changes is not clear, but the significantly expanded PD rights for changes of use in Part 3 undoubtedly have the beneficial effect of accelerating the desirable elimination of office space which, if not immediately redundant, would have been likely to become so in the fairly near future.

Far from seeking to resist the changes of use permitted by Part 3 of the Second Schedule to the GPDO, local authority planners and their elected members should welcome this trend, and the contribution which the amended GPDO is making to bringing about these necessary and desirable changes.



  1. In regards to this, on a current Prior Approval 'application', a planning consultant has argued that a Direction preventing CoU B1(a) to C3 does not apply where Prior Approval has been previously 'granted' prior to 15th September 2017. This seems a dubious assertion, at best, but other than by engaging the services of a reassuringly expensive lawyer, how might one go about establishing the veracity of such a claim?

    1. I take it that Passer-by is referring to an Article 4 Direction.

      Article 4(2) provides that an Article 4 Direction does not affect the carrying out of development permitted by any Class in Schedule 2 which is expressed to be subject to prior approval where, in relation to that development, the prior approval date occurs before the date on which the direction comes into force and the development is completed within a period of 3 years starting with the prior approval date.

      This, however, would have applied only to the proposed development that was the subject of the previous prior approval, and subject to its completion within 3 years from the prior approval date. I do not see how this can be carried over to the current prior approval application. The Article 4 Direction would appear to me to preclude permitted development under any prior approval granted after the direction took effect. (However, as usual, this does not represent legal advice, and is simply an expression of opinion based on the very limited facts given by Passer-by.)