Lenders are becoming increasingly reluctant to finance office-to-resi schemes as the end to temporary changes to planning rules making the conversion of use easier looms ever closer.
Chancellor George Osborne had been expected to provide the expected update in last week’s Autumn Statement on whether schemes to convert offices into residential would continue to qualify for Permitted Development Rights beyond the current 2016 deadline. However, he made no mention of Permitted Development Rights in the statement.
Voltaire Financial founding partner James Thomlinson said this was a missed opportunity.
“We are seeing a marked hesitancy amongst otherwise willing and active providers of residential development finance in relation to schemes that qualify for Permitted Development Rights,” said Thomlinson.
“The key issue for them is the government’s current deadline of May 2016, by which time completed residential units must be occupied,” he added.