Could turning unused office space into flats help solve the housing shortage?

City centers can look quite deserted on a Friday afternoon, not only because there are fewer people commuting, but also because the work spaces themselves are getting smaller.

According to law firm Boodle Hatfield, office space the size of 487 football pitches was removed from the UK market in the first two years of the Covid-19 pandemic alone.

Since then, more has disappeared as the hybrid work culture has become more established.

This leaves many vacant or half-empty buildings standing, including in top destinations such as Canary Wharf, the West End and the City of London.

Amid an acute housing shortage, many have proposed turning offices into homes to give struggling Britons a foot on the property ladder.

Commercial real estate group CBRE estimates that almost 28,000 homes could easily be delivered converting all vacant second-hand office stock in central London.

Scott Cabot, CBRE’s head of residential research, said: ‘The risk of stranded offices no longer meeting occupier needs or proposed regulatory requirements is putting the repurposing of these assets at the forefront of investors’ minds. and we are already seeing some evidence of that. this.’

His company calculated that between early 2022 and May 2023, £1.3 billion worth of offices in central London were bought with the intention of converting them to other uses.

While not all of this will be converted into residential space, he adds, “it does highlight that investors are increasingly taking advantage of the opportunity to convert outdated offices.”

Repurposing existing buildings instead of creating new ones is a concept that is gaining ground, thanks to stricter energy efficiency regulations and measures to reduce ’embody carbon’ (the emissions associated with building from scratch). of a building).

Emma Swinnerton, head of flexible workspace at Cushman & Wakefield, said older buildings in city centers are “typically well suited to residential transformation”, especially buildings that emerged during the office building boom of the 1970s and 1980s.

Delta Point: The former BT office – pictured here before the renovation – now has 404 apartments

Galliard Homes has been at the forefront of such developments in recent years, overseeing the transformation of Riverdale House in Lewisham and Trinity Square in Hounslow, once home to American Airlines’ European operations.

Criterion Capital is another company that has jumped on the bandwagon and developed several locations in the South London boroughs.

Head to Croydon and you can see one of the biggest developments: Delta Point, a former BT office that also served as Gotham General Hospital in the film The Dark Knight Rises, but is now home to 404 apartments.

A much more iconic filming location, the BBC Television Center in White City, has over 400 homes with a further 511 on the way, complete with a gym, communal garden and 24-hour concierge, and all opposite Westfield shopping centre.

But the trend to convert offices into homes is certainly not limited to the capital.

Two years ago the Local Government Association found that more than a third of new homes in Harlow, Luton and Walsall were former offices, while the equivalent figure for Trafford in Greater Manchester was 56.5 percent.

These conversions have been possible thanks to permitted development rights (PDRs), which allow developers to reuse offices without planning permission, within certain limits.

Making it easier to convert commercial properties into residential properties seems, on paper, a simple answer to expanding housing supply in Britain, given the enormous difficulties developers already face in getting plans off the ground.

According to the Town and Country Planning Association, a charity and campaign group, more than 100,000 conversions have taken place through PDRs in the past decade.

However, since their introduction, PDRs have been hugely controversial.

Conversion issues: Permitted development rights can reduce the amount developers contribute to affordable housing and local infrastructure

Backlash against poor quality office housing

Rosalie Callway, project and policy manager at the TCPA, says they can lead to substandard housing, especially if larger office and industrial estates are converted.

She says many don’t adhere to some of the organization’s eleven Principles of ‘Healthy Homes’such as fire safety, access to natural light, climate resilience and noise and light pollution restrictions.

She adds that they can reduce the amount developers contribute to affordable housing and local infrastructure, “which is important because a development brings new families and individuals to an area.”

The group published in February These are housesa photo collection with particularly boring examples of office-to-home conversions.

One photo was of Newbury House in Ilford, east London, a development of 60 studio flats averaging 18 square meters in size and without any access to private or communal open space.

The UK government’s Nationally Described Space Standard recommends that a one-bed house for one person should be at least 37 square meters in size, and 50 square meters if there are two people.

There have been loud calls to ban or severely restrict office-to-residential conversions under the PDRs.

Three years ago, Croydon Central MP Sarah Jones told Parliament she had done so ‘handled many cases of substandard accommodation’ while calling for the banning of PDRs. One of those cases was Delta Point.

Callway said the TCPA is not opposed to turning office buildings into residential properties, but that these developments are taking place “in areas that can support new residents, that do not harm commercial streets and undermine resources for existing communities.”

But even if regulations ensured that all renovations were of good quality, upgrading buildings to install bathrooms, kitchens and security measures could make such projects unfeasible.

And more importantly, they would barely make a dent in Britain’s huge housing backlog – which is estimated to be 4.3 million by the think tank Center for Cities.

What else can be done to build more housing?

Many property developers would argue that the incoherent and bureaucratic planning system needs to be overhauled.

One idea advocated by a growing Yimby army – “Yes, in my backyard” – is ‘Street voices’ where residents of each individual street have the power over what type of buildings are allowed on their specific road.

Construction boom: Removing Green Belt designation from all land within half a mile of a train station could free up space for up to 1 million homes near London

Some local residents might decide not to allow new buildings or extensions on their street, but others might in turn welcome very extensive plans.

The government could also try to relax regulations on the green belt. Removing the Green Belt designation from all land within half a mile of a train station could be possible free up space for up to 1 million homes around London aloneaccording to the Adam Smith Institute.

If this is accompanied by a relaxation of financial restrictions on local authorities, much of this million would be much needed social and affordable housing.

A report published in early October by University College London called for one ‘transformative national housing plan’ £4 billion of extra money is needed to build 72,000 extra homes every year.

Given the record of successive governments on housing development and the prevalence of Nimbyism, the likelihood of truly ambitious proposals becoming reality is slim.

But what is almost certain is that if Britain were somehow magically flooded with new housing developments, office-to-residential conversions would not play a major role.