Are changes to the conversion process bad news for commercial property?
Removing the obstacle of planning permission from commercial to residential conversion should be a positive thing. Less red tape, quicker conversions and fewer empty high street premises. The government wins too; increased redevelopment of old buildings and less demand for brand new developments.
With that considered why were 64% of people against the idea when the notion was originally put to councils, businesses, local authorities and individuals in 2012?
The main concern is that while these conversions might, in theory, ease the pressure on residential demand, the cost of commercial space will be sent spiralling due to the lack of availability. As we previously discussed, the high street is undergoing somewhat of a revival across the UK and the commercial property market is showing signs of growth once again.
With agents reporting that commercial property demand is outweighing supply already, the conversion of premises is unlikely to help the situation. What’s more, a knock on effect of this could be a hit to high street retail. If an office of 20 workers is converted to a residential flat, will shops and cafes be missing out on lunch time and after work business?
If this catches on across the country, then we could invariable see a very different looking high street, with residential properties far more prominent than they are now. As stated before, this will surely increase the demand and increase the price for commercial properties, but it could also affect the residential market. If the government is trying to ease the pressure on residential demand by encouraging conversion, it could be mean in a decline in the number brand new housing developments, another area which is already in high demand.
There is also a question over whether the process is actually quicker than applying for planning permission. Change of use now requires prior approval, which still involves analysis of a number of circumstances before conversion can occur, as we explained earlier this week.
Let us know your thoughts on the change of use process. Have you experienced the prior approval process and was it faster than planning permission?
Commercial property owners, would you consider changing your premises to residential? What effects do you think these changes will have, not only on commercial property prices, but also on high street retail and commercial property demand?
More information can be found at the government planning portal website.