Increasing number of applications to convert unused retail space into homes are being rejected
The number of rejected planning applications to convert retail property into residential space increased by 35% last year, says Boodle Hatfield, the leading private wealth law firm.
Boodle Hatfield says the percentage of applications for retail to residential conversions that were rejected by local authorities rose from 34% to 39% (2018/19 – 141 out of 419 applications compared to 191 out of 485 last year*).
Boodle Hatfield says there is now a huge opportunity to convert redundant retail space into high quality residential homes. The retail sector, already struggling with rising rent costs and the switch to ecommerce, has been dealt a further blow by covid-19 and the associated lockdowns.
Land Securities, the UK’s largest property company, recently announced plans to convert some of its retail space, which makes up the majority of its current property portfolio, into residential homes. Property developer Ballymore also recently acquired the Broadwalk Shopping Centre in North London with the intention of converting a large proportion of the site into homes.
It is important though, Boodle Hatfield adds, that these conversions are of a high quality, as this will improve their chances of receiving planning approval.
Simon Williams, Partner and Head of Property at Boodle Hatfield says that local authorities are more likely to look favorably on high quality proposed conversions especially if the schemes are sustainable and properly integrated into the local community.
Adds Simon Williams: “Developers and local authorities need to work closely together to ensure vacant retail space is put to good alternative uses, like residential. The high number of refusals suggests that developers and local councils have not been on the same page as to what these new homes need to deliver and what the standards are that need to be met.”
“With the UK’s housing shortage reaching ever higher levels, it is now estimated there are more than one million new homes needed to meet demand.”
“Unused commercial space could be invaluable in helping to increase supply in the housing market. This could be one of the few benefits to come out of the coronavirus crisis.”
*Source: Ministry of Housing, Communities and Local Government: year end June 30 2020
This article first appeared in the Daily Express and CoStar on 17 December 2020.