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Office to Residential Permitted Development Right Made Permanent.
On Friday the Secretary of State made good on the Housing and Planning Minster’s Statement of November last year, laying the Statutory Instrument to extend the permitted development right (PDR) for office to residential change of use. It will come into force of 6th April. Many of the changes ‘hinted’ at last year are included, and the surprises we might have expected are not. The headlines are as follows: The PDR will be permanent, with the 30 May 2016 deadline removed. Any PD scheme must be completed within three years of the date of prior approval. The trigger is now ‘completed’ rather than the use having to have been ‘begun’. The noise generated by commercial premises and its impact on intended occupiers of the residential units may now be considered (in addition to transport and highways impacts, and flooding and contamination risks). The areas which are currently exempt from the PDR will continue to benefit from their exemption until 30 May 2019. Beyond this date, an Article 4 Direction would be needed to remove the Right. All future applications must state the number of units proposed. There is a requirement for the legislation to be reviewed a minimum of every five years. And that’s it. No space standards. No requirement for starter homes. No real surprises. Allowing noise impacts to be considered seems a reasonable addition; in practice it may take a while for both applicants and local authorities to gain a fair understanding of how this can be applied or indeed mitigated for – but without an impending time limit, both parties can take a little longer to work this out without the risk of losing the Right. It also, of course, gives applicants more scope to appeal, without the fear of not having enough time to build out the scheme once they have gone through the appeal process.The removal of ‘the use of the building…was begun’ is a step forward for clarity. This wording in the 2015 and current General Permitted Development Order (GPDO) added unnecessary uncertainty into the process, having never been formally defined. It is replaced with the clearer condition that a developer can complete the development within three years of the date of prior approval. This also applies to existing prior approvals. Of course, if time is running out on some of those, the extended Right means that a prospective developer can now simply re-apply and gain another three years.The exempt commercial areas are still exempt, and will be until 30 May 2019. This gives the likes of the City of London, Westminster and other inner London Boroughs plenty of time to apply for Article 4 Directions to remove the Right; I would expect these to come forward in the next 12-18 months.All change of use to residential prior approval applications made after 6 April 2016 will have to state the net uplift in units proposed. The cynics in this office (no names mentioned) suggest this is simply a way for the Government to track the success of office to residential PD (although not delivery of course). I on the other hand am sure there is another perfectly rational reason for inclusion of this requirement … I will let you know when I work it out.No news yet of the right to knock down and rebuild under the offices to residential PDR. The main reason for this is a need first to facilitate the necessary GPDO changes via a technical clause in the Housing and Planning Bill 2015 - 16, which would allow for such works to be considered as permitted development (they currently cannot be). Once the Housing and Planning Act is passed (assuming it gains Royal Assent more or less in its current form) then I expect a PDR for the demolition of an office and its replacement with residential use to follow shortly thereafter.The new statutory Instrument also introduces a PDR for the change of use of light industrial B1(c) to residential – although this will not come into force until 30 September 2017 and will only run until 1 October 2020. This temporary right, much like the PDR for ‘Warehouse, Storage and Distribution to Residential’ is limited to 500sqm and must consider the impact on the industrial offer in that location. The amendment Order also introduces the change of use of laundrettes to residential (my colleagues have their own view on this)In making the office to residential change of use permanent, the Conservative Government continues to back the delivery of housing on brownfield land. There is no doubt it will impact on available office space (it already has) and in many Central London areas, the office values are making the PDR a less viable option. But outside Central London, I suspect the office to residential PDR will remain as popular as ever and the added certainty is likely to drive a spike in activity in the near future.NLP Planning will be hosting a breakfast event on office to residential PDRs in early April. Follow me on Twitter for more updates - @OwainNedin  

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Office to Residential Change of Use – Permitted Development Right… the next chapter
The long-running saga of the ‘will they, won’t they’ debate around the office to residential permitted development right (PDR) appears to have come to an end… sort of…ish…maybe. I have written previously about the uncertainty the delay in any further announcement has caused and the negative impact this was having on the instrument’s ability to deliver housing. There has been, for quite some time, a need for the Government to either commit to the long term future of this PDR or end it and find another means to help the delivery of new homes. It was no surprise that the Coalition Government stayed relatively quiet on the matter pre-election – being as the PDR had not been universally popular and was hardly a vote winner. But in the last two weeks, the now Conservative Government announced they were ‘Fixing the Foundations’, a ‘productivity plan’ including a whole chapter dedicated to ‘Planning freedoms and more houses to buy’. If ever a title suggested that the PDR for office to residential change of use was up for discussion it was this one. But alas, not a single word on the matter. But now, whispers abound that something is on the cards. In fact, in the days following the Government’s new Plan, the industry rumour mill went into over-drive and a common consensus was reached (albeit without a single formal word on the matter – save for Greg Clarks’ open ended ‘continuation’ of PDR comment, reported last week). The PDR is to be extended (either indefinitely or for a further fixed period) and all area exemptions are to be removed. The author had no insider knowledge confirming the proclamation, however having heard and read identical from many a source, I have no reason to doubt that it is likely to be the case. More excitingly, the announcement was said to be due to be made (and Statutory Instrument laid) on Tuesday last week! Only, of course, it didn’t happen. The reason it didn’t (so we understand) was due to some serious lobbying from the Mayor’s Office and London Boroughs, among others. And, it has to be said, for good reason. If the exemptions are removed, the only means for a Local Authority to ‘protect’ its existing office stock is to issue an Article 4 Direction, which, under current legislation requires a notification period or 12 months prior to it coming into force (it is possible to install an immediate Article 4 Direction – however the Local Authority can then be subject to compensation claims). Some areas have already made Article 4 Directions; the areas covered would be ‘protected’. Most areas have not and neither are they exempt from the current PDR and therefore normal service would resume should the PDR be extended. However, for some areas, a serious issue could be just around the corner. The entire City of London, RBKC, most of Westminster, central parts of Islington and Camden as well as the Isle of Dogs, to name a few, would lose their current protection by exemption. All of the office stock in RBKC (excluding listed buildings) would immediately be at ‘risk’ of conversion. This is a Borough with an average residential value of £1,081/sq. ft.[1]. Likewise Westminster, with average values of £889/sq. ft., would find its West End and fringe commercial markets particularly vulnerable. And who knows what would happen to the City of London, where policy currently identifies only 10 site specific areas where residential use might be appropriate. All this ‘protection’, gone, overnight. Protection in these areas, and others, is clearly required. The purpose of the PDR was never to strip London of its commercial centres, weakening its global commercial position. But ensuring this protection is in place will now cause further delay. The question is how to deal with Article 4 Directions in these areas. The current PDR expires in 10 months’ time. If the extension to the PDR has to be delayed for 12 months to allow Article 4 Directions to be made and come into force, then many extant prior approvals which are unimplemented (or possibly those part-implemented, depending on the definition of ‘begun’[2]) will expire. If these local authorities proceed with immediate Article 4 Directions, under current legislation, they may risk substantial compensation claims. I suspect local authorities are preparing their Article 4 Directions as I write. They will have to be well-researched and justified, or they risk a Secretary of State veto (or at the very least, amendment e.g. to the extent of the area they cover), so it is no easy or quick task. Potentially, the Government may extend the current PDR for a set period (say 3 or 5 years, or even indefinitely) with current exemptions expiring on a set date within this period (say 31 December 2016). This would give those areas with a current exemption adequate time to make an Article 4 Direction and for it to come into force after a 12 month period. The development sector, as ever, would simply like a little clarity and certainty on what’s coming next… [1] http://www.theguardian.com/business/2015/jun/23/surreal-estate-kensington-chelsea-properties-soar-to-11635-a-sq-metre [2] This issue was enough to have its own blog  – see previous comments on this matter here 

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