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Carrying out an office to residential conversion - what do you need to consider?

In 2013 the government introduced permitted development rights (PD Rights) for a change of use from office to residential use. The PD Rights were to apply for a limited time only, and expire on 30 May 2016. PD Rights effectively give planning permission without the necessity of obtaining a planning permission, although there is a prior approval process in respect of certain issues. This saves both time and cost for developers and also removes the uncertainty associated with obtaining a planning permission.

The Housing Minister, Brandon Lewis has indicated that the PD Rights for office to residential conversions will be extended beyond May 2016, but no formal announcement has yet been made. So, what should you do if you are considering, or in the process of, carrying out an office to residential conversion?

What is residential "use"?

The Town and Country Planning (General Permitted Development) (England) Order 2015 states that the PD Rights will not apply if the use of the property as a dwellinghouse (C3) began after 30 May 2016. 

What constitutes "use" as a dwellinghouse? 

Some believe that for the use to have changed to a dwellinghouse, there is no requirement for people to be living in the property; it just needs to be ready for occupation. However if actual use is required, a building that is ready for occupation but has not been sold or let by 30 May 2016, would not qualify. Therefore, it would not have been developed pursuant to the PD Rights and would require planning permission to be a lawful development.

Multi-occupied buildings

Right now there are many unanswered questions relating to multi-occupied buildings. For example, what proportion of units within the development has to be in use by 30 May 2016? Will a building with occupation of 48 out of 50 units qualify? What if only one is occupied? Is there a threshold of occupation that must be met? 

What should developers do?

Given the uncertainty presented by all of these questions, what should developers, who are aiming to complete an office to residential conversion by 30 May 2016 do? It is now just over eight months before the PD Rights expire. Developers are unlikely to know with any certainty whether they are going to be able to fulfill all of the requirements. Therefore, steps to ensure that the development is lawful, and not open to enforcement action, need to be taken now.  

Funders will be very wary of relying on the PD Rights at this stage, so this is a further consideration for developers. The safest course of action is to apply for planning permission for change of use. In doing so, both the developer and any funders will be certain that, even if all of the conditions for taking advantage of the PD Rights are not met, the development is lawful.

Even if you have used the PD Rights to effect a change of use, you may wish to consider obtaining a retrospective planning permission if, for example, some of the units in a building are not yet occupied or may not be occupied by 30 May 2016. This will give more certainty to funders, as, without it, there will be uncertainty as to whether the residential use was commenced by 30 May 2016.

Contributor: Alexandra Holsgrove Jones

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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