Vacant secondary offices, a dramatic increase in value
In 2013 the Government changed Permitted Development Rights legislation to allow developers to convert offices to residential use without the need for full planning consent. The developments can be delivered with 100% private units, in other words without the inclusion of the social rented or shared ownership accommodation that is associated with a full residential planning consent, writes Duncan Campbell of Campbell Gordon.
This has led to an explosion of these types of conversions. This has delivered critically needed affordable private homes to the market. It has meant new life is being breathed into disused vacant secondary offices that have been left languishing in our towns and neighbourhoods. It has not however all been plain sailing. The quality of the conversions has varied, but by and large the initiative has been a great success for people needing homes, for the property industry, and for property owners.
The relative simplicity and speed of conversion has attracted many new developers into the market. The demand from developers for opportunities has driven prices up dramatically. Values have risen by as much as five times since the 2013 change in the law. This sounds unbelievable, but it is correct. This provides a route for owners of office buildings to realise value significantly above historic levels. We have found both owner occupiers and property investors have chosen to take advantage of this opportunity and sold buildings for conversion in this way.
There are some constraints. These can arise from title restrictions, Article 4 (which is the local planning authority seeking to limit the conversions), planning contributions, environmental restrictions and utility issues.
Campbell Gordon is a leader in this market in the Thames Valley, having sold buildings in Abingdon, Bracknell, Henley, Newbury, Reading and Wokingham. It is currently advising on prospective sales across the Thames Valley and West London. For a more detailed market briefing, including an appraisal of achievable sale price on a property asset, contact Duncan Campbell.
