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‘Offices to Homes’ Policy Comes Under High Court Fire

Office Builing TraditionalIn a crucial test case for businesses and property professionals, local authorities who say that they were unfairly refused exemptions from controversial changes in planning rules that allowed wholesale conversion of offices into homes have taken their complaints to the High Court.

The London Boroughs of Islington, Richmond-upon-Thames, Camden and Lambeth argue that, amidst rocketing house prices in the capital and the end of the recession, hard-pressed small businesses will be the heaviest hit by the change – many of them having to move to peripheral areas – and that the loss of employment opportunities in economically vital areas will be irreparable.

The Councils had sought, but were refused, exemptions by the Secretary of State for Communities and Local Government after he announced the creation of new permitted development rights which meant that buildings used as offices could be converted into homes without planning permission.

Islington asked that five parts of the borough be exempted from the rule changes on the basis that a loss of office space would have ‘substantial adverse economic consequences’ for those areas. The Council estimated that 57 per cent of office space in the relevant areas had high potential for residential conversion and feared that commercial tenants would be offered financial incentives to move out.

There would, Islington claimed, be a serious loss of relatively small affordable business units; support services businesses would be forced to move out of central London and the loss of employment sites would gravely hamper the areas’ economic development.

Richmond wanted the town centres of Richmond, Twickenham and Teddington – as well as the National Physics Laboratory – exempted, pointing to the exceptionally high value of residential properties in the area. The ‘economically bouyant’ borough – which scores top in London in terms of business density – had very limited land available for employment use and the Council already took a ‘flexible approach’ to planning applications for conversion of offices to other uses.

With a wealth of international businesses and small firms clustering in Richmond town centre, the Council argued that potential job losses would be measured in thousands.  Camden, an important hub for booming cultural and creative industries, and Lambeth put forward similar reasons in pursuit of exemptions.

The Councils’ lawyers said that they are not mounting an attack on the ‘macro-political’ reasoning behind the rule changes, but insisted that the Secretary of State’s refusal to grant the exemptions sought was ‘unfair’ and based upon inadequate reasoning. The Councils did not receive enough information on which to base their applications; nor were they given sufficient time to prepare them, it was submitted.

In defending his decisions, lawyers representing the Secretary of State argued that the shift in planning rules was essential to meet the severe under-supply of homes, particularly in London. Exemptions were only granted ‘in exceptional circumstances’ where Councils could show that the rule changes would have a serious economic impact or lead to the loss of ‘nationally significant areas of economic activity’.

The Court will give its ruling on the Councils’ judicial review challenge at a later date.