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2011 Budget – Commercial to Residential Conversions

George Osborne’s Budget speech included mention of the Government’s intentions to consult on a change in the Use Class Order to allow changes of use from business, general industrial and storage sites and buildings to residential developments. The apparent thinking behind this move is to support the urgent need to increase housing supply. 

Whilst some empty office premises in town and city centres may be suitable for such a change and may even result in desirable living space, other uses and their associated operations could have serious impact upon residential amenity, particularly in terms of smells and noise generated; not many people would wish to live next-door to a heavy industrial use or chemical plant.

To prevent conflicts between businesses and residents most industrial and distribution businesses are located outside of urban areas away from all residential development and the shops and services that support them. By allowing the change of use of premises located out of urban areas, surely this would conflict with the objectives of sustainable development; another key aim of the Budget’s ‘Plan For Growth’ document. The proposals could lead to isolated communities with no access to public transport, schools or other essential facilities.

Whilst residential land supply is an issue, the biggest problem facing the housing market at present is the lack of mortgage availability for first-time buyers and the impact this has on the house buying ‘chain’.  There is actually no shortage of housing available to buy due to this and as such the proposed measures announced by Mr Osborne may have little effect.

The piecemeal occupancy of commercial premises for housing purposes will not play a major part in increasing housing supply on a large scale. The proposed permitted change seems narrow minded and is not likely to address a key issue in the short-term.

Another thing that seems not to have been considered is the future impact such a move could have on employment land supply. As the economy recovers, where are new businesses expected to locate if all premises have been converted into housing? Maybe to the countless part-built housing estates lying empty across the country…

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