How will latest PDR rules affect office-to-residential conversions?

Under the new rules, PDR has been extended to some high street asset classes in the hope that homes will breathe new life into failing town centres.

The previous right under planning Class O to convert an office of unlimited size to residential has been scrapped. Instead, those seeking a conversion with permitted development will need to secure consent under the new Class MA, which has a limit of 16,145 sq ft per building. Office-to-residential applications for conversions greater than this will need to go through the traditional planning system with all that this entails, including s106 requirements.

Adding further to developers’ woes is the introduction of a three-month vacancy period prior to the date of application (excluding Covid-related vacancy), which not only has income and empty rates tax considerations but makes it increasingly difficult to plan ahead.

However, it is not all bad news. The new Class MA will enable the conversion of the whole of E use class, including shops, restaurants, health centres, nurseries and gyms. This will also apply to units in conservation areas and may come with a fee of between £100 and £5,000 per home.

While this may be welcomed, any move to convert health centres and nurseries or any amenity that serves the local community is likely to be unpopular. Because of their size, these buildings are also unlikely to lend themselves to conversion or be sufficient in volume to help address the housing shortage.

While it remains to be seen how these new changes will transform our high streets and office buildings, there is no doubt that further, and even more ambitious, changes to the planning system are on the way in a hotly contested Planning Bill later this year. Hold on to your hats.

Anthony Dixon is associate partner, land and development, at Allsop