More offices being converted into new homes
Posted 31 October 2013 by Keith Osborne
With demand continuing to heavily outstrip housing supply, a growing number of developers are opting to buy and convert offices into new homes, new research shows.
According to specialist lender Bridging Finance Limited, more developers are taking advantage of new rules allowing for the change of offices into residential use without the need to obtain planning consent.
Chris Baguley, managing director of Bridging Finance Limited, a short-term funding provider to the professional sector, says that he is not surprised to see an increase in the volume of offices being converted into residential use.
"Many towns and cities have office blocks, warehouse and business parks needlessly lying empty. At the same time there is a growing demand to live in town centres with the local amenities and transport links," he said. "By changing the planning rules, the government has freed up property investors to make use of vacant office units and turn them into new homes."
Government data shows that 2009-10 housebuilding hit a record low of 129,000 new homes, the lowest level in any peacetime year since 1924. Only 2.8% came from office conversions. This is at odds with the latest commercial vacancy rate of 7-9%, which suggests there is an oversupply of commercial land, much of which could be converted into residential use.
Baguley added: "Converting commercial and semi-commercial property into residential use results in the regeneration of town centres and stimulates the local economy by engaging local businesses to support the centrally located population. Since the planning rules changed, we've seen an increase in investors successfully executing this by converting redundant offices into residential properties."