The London New Homes Report from Knight Frank has now been released. The report Analyses the market drivers of the capital’s new build residential market, as well as case-studies of exemplary large mixed-use schemes, and opportunities to convert office blocks into residential schemes.
A section of the report focuses on Permitted development – New homes boost for London? London seeing the first slug of applications to convert large offices into flats since 2021.
The report states that earlier this year, the Government loosened restrictions around the conversion of commercial buildings to residential. Previously, the permitted development space cap was 1,500 square meters. However, as of March, this cap has been removed.
Over the course of the following six months, developers in London have put in applications to build 1,875 new homes on sites which involve converting a commercial building of at least 1,500 square metres, according to analysis of council planning websites and Molior London.
Stripping out a rush of applications in 2021 before the space cap came in, it is the highest volume of applications for large 1,500 sqm plus commercial-to- residential conversions recorded over these six months to end August in nearly a decade (see below graph). This demonstrates the relaxation of the space cap is already leading to a pickup in new homes coming forward.
However, for context, 1,875 homes represents around 5% of total annual London housing delivery, which was 35,000 in the year to the end of March 2023. Plus, a number of councils have already refused some of the larger applications, resulting in around 300 homes being blocked since March.
It is nearly 20% higher than the 1,400 homes that came forward in the same time-frame pre-pandemic in 2019 (looking at applications to convert an office of at least 1,500 sqm between March and August). But well below the volume shortly before the space cap came in. In the six months to end August 2021, applications for 3,375 homes came forward, although it’s worth flagging that schemes totalling 700 homes were refused in the end.
To read the report in full visit: www.knightfrank.com/research/report-library/the-london-new-homes-report-2024-11608.aspx
