Pitched as an answer to the country’s housing shortage, whilst making it refreshingly less painful for the nation’s home owners to improve their proverbial castles, May 2013’s relaxation of permitted development rights (PDR) was hailed as an exciting move.
However, many in the property industry point to a north-south divide having resulted, especially regarding commercial to residential conversions.
The Royal Institute for Chartered Surveyors (RICS) reports that applications for office-to-home conversions in London and the South more or less doubled, although some southern councils have tried to block such activity.
More affluent cities such as Oxford, Cambridge and Bristol continue to witness offices being converted into residences. Research by LSH estimates that during 2014, just shy of 7m sq ft of office space (equating to around 50% of Manchester’s office market) was allocated for conversion.
Manchester Performs Best outside London
When it comes to the north and to cities like Manchester however, the story is rather different. The aforementioned report by LSH earlier this year placed Manchester as the best performing city outside London in terms of commercial property.
This enormous pressure on supply means rents will remain at their highest ever levels, some even pushing £35 per sq ft. With office space in this flourishing city in such demand, the appetite to convert commercial premises to residential understandably remains low.
The exemption zone successfully negotiated by Manchester City Council prevents office space in prime areas such as Spinningfields, Piccadilly, Deansgate and the NOMA district being turned into homes, which is another reason PDR uptake is proving slow in this North West city.
PDR changes are being taken advantage of in smaller North West cities, though, examples being Chester’s 30,000 sq ft Heritage Court conversion by Blueoak Estates, and Tuston Developments’ conversion of a 16,000 sq ft 1980s office into residential apartments in Preston.
In less than twelve months’ time, such favourable permitted development rights will come to an end, so the second half of 2015 may well see an increase in office to residential conversions across the North West, including its Liverpool and Manchester powerhouses.
An extension to the PDR deadline would likely result in increased applications, as would reducing the exclusion zone, taking the conversion focus away from Salford, Ancoats and other suburbs to the East. Office to residential development is a balancing act but produces some stunning city living accommodation.