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Office to residential use: a breath of fresh air for property investors

by Published on

Since May 2013, there has been a temporary right for the owners of commercial office premises to legally convert them and change their use from office space to residential use. This temporary right was, however, due to expire on 30 May 2016, meaning any such change of use after that date would not have been permitted without the grant of an express planning permission from the relevant local planning authority for each proposed change.

As a result of the Government’s commitment to having 1 million new homes by 2020, this right to change the use without express planning permission has been made permanent. Owners of commercial office space are, then, no longer stifled by the time limitation. Accordingly, it presents an extended opportunity for those with disused office space to seek to secure the maximum potential from it.

In addition to the above, the Government also proposes, in time, to permit the demolition of office buildings and the re-building of residential accommodation. This additional right will though be subject to prior approval being obtained from the local planning authority and other limitations. More detail is awaited on these. The Government also plans to extend the deemed planning permission for change of use to encompass changing the use of light industrial buildings to residential use, providing further opportunities for a broader spectrum of commercial property owner.

It should be noted, however, that, although express planning permission will not be needed, it is still likely to be the case that prior approval of the local planning authority will be needed in respect of flooding, contamination, highways and transport issues. Also, a change from office to residential use may impact on the tax payable in respect of the property.

Additionally, the exceptions to the class J permitted development right will remain, although these are minimal. The most relevant of these for most properties is that the deemed planning permission will not apply if the office is contained inside a listed building or within the curtilage of a listed building.

Notwithstanding these limitations, this announcement by the Government presents a renewed and significant opportunity for current or potential property investors. It may allow them to broaden or diversify their portfolios, without the need for lengthy and costly planning applications.

If further information is required in relation to planning or other commercial property matters, please contact Chris Morgan, a solicitor in our Commercial Property team on 0191 255 0206 or at chrismorgan@samuelphillips.co.uk.

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