Office-to-resi conversions fall 19 percent

Office-to-resi conversions fall 19%

Office-to-residential conversions dropped by almost one-fifth in 2015/16, new figures have revealed.

Data published by peer-to-peer lending platform Saving Stream showed there were just 2,388 such conversions in the year to 30th September 2016, down from 2,942 in 2014/15.

This news follows a freedom of information request submitted by Development Finance Today (DFT), which found that only five permitted developments occurred in the City of London over 2015 and 2016.

Liam Brooke, co-founder of Saving Stream, said: “When there is a clear need for more residential development across the UK, it’s surprising that the number of conversions has fallen over the last year.

“Office-to-residential conversions tend to be very successful and with the relaxing of the rules made permanent early in 2016 we would have expected the number of conversions to be on the rise.”

In November, housing minister Gavin Barwell announced that permitted developments rights would be extended to allow for the demolition of office buildings to make way for housing.

Earlier this month, DFT revealed that 50% of property professionals expect permitted development schemes to be more popular in 2017.

However, Saving Stream has now warned that without the funding necessary to get projects off the ground, developers have not been able to take advantage of permitted development rights.

“Indeed, since the Brexit vote, banks have reduced their exposure to the property market even further, giving private investors access to better investment opportunities,” Liam added.

“Densely populated areas such as London and the South East have been particularly badly affected by the housing crisis.

“In these areas, however, there are also likely to be higher amounts of redundant commercial buildings which could easily be converted.”

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