Avoiding the Pitfalls of Permitted Development
Peter Jones, associate director at HDR, explains how to successfully convert offices to dwellings or mixed-use schemes under permitted development
One of the major impacts of the COVID-19 crisis for the property and construction sector is the occupation of office buildings, or lack thereof. This has fueled the discussion around permitted development of workspaces into homes.
Whereas pre-COVID, only 5% of people worked from home, this rose to 25% during the first lockdown according to the Office for National Statistics, the U.K.'s largest independent producer of official statistics and the recognized national statistical institute of the U.K. Although there were initial stresses for both managers and staff as a result of this seismic shift to homeworking, most people have discovered the transition has many benefits including no commuting, or loss of productivity and more time with the family. This has meant employees reconsidering the way they work in the long term.
Employers, too, are realizing that this can benefit their businesses. As several months have passed since the initial lockdown, a new trend has emerged for hybrid working with people sometimes present in the office, sometimes working at home. A survey from Atlas Cloud1 shows that almost two thirds of respondents are working this way. As a result, employers find they require less office space, one of the biggest expenses for businesses, since all the staff are never all there at the same time.
A surplus of office and commercial space has been a trend for a while now. According to a report by RICS in 2019, demand for office space was already falling then and was at the time predicted to fall further. And the Financial Times reported in October that more than half a million businesses are in financial distress. They are likely examining which overheads can be easily cut.
Landlords, therefore, faced with reduced rents or unlettable space are looking for new ways to maximize returns on their investments. It is becoming increasingly attractive to convert an office to residential use, rather than risk being unable to let an empty office building. The permitted development planning policy was introduced in 2015, initially as a temporary measure, allowing owners of office space to convert offices to flats without planning permission and was extended indefinitely the following year. In 2020, this was extended further to allow a two-story extension on top of existing buildings. For developers and owners of office buildings, this was welcome news as there is a strong business case for converting offices to dwellings as the returns on residential sale or rent can be higher than for offices.
For our part, HDR has delivered around a hundred permitted development schemes since 2014, delivering over 3000 new dwellings and a further 1000 dwellings through non-PD schemes, mostly new build. These include Compass House in Southampton with 241 flats, Foxhunter Drive in Milton Keynes with 172 flats and Regent House Brentwood with 136 flats, a plus offices formerly occupied by the likes of Mothercare, IBM and Bayer.
Our vast knowledge base of the challenges posed by permitted development schemes means we have a toolkit of tried and tested solutions. This has been developed through original thinking, plus close coordination with the client, the design team and other key project stakeholders to deliver the best end product possible.
Permitted development projects need to look appealing to potential renters or homeowners from the outside as well as inside. Re-cladding in, for example, a brick-type render can give a more residential appeal. Lack of natural daylight towards the centre of a floorplate may also cause an issue. This otherwise dead space can be used for amenities such as a gym or used as storage, instead of living space. The main challenge is making an office feel like a home which is where we come in, in terms of both M&E and interior design, improving things like low ceilings and exposed services, while at the same time maximizing saleable floor space and minimizing unsaleable plant space. Measures can range from making sure windows are openable to planning for additional insulation. The opportunity also exists to make sustainable choices, as well as cost-efficient ones.
We also deal with issues arising from utilities such as the transition from a handful of toilets to between 100 and 150. A good example of our work in permitted development is Robart House in Leytonstone, east London. This was the conversion of a former job centre and offices to create 40 new dwellings. The building needed a larger electrical supply and we managed to save the client a substantial sum by sourcing an alternative utility provider to the local electricity board. In design terms, the existing basement was largely unused and had very low headroom as well being very dark. We made the space more suitable for living accommodation by digging new, large lightwells externally to bring light in to the spaces. The existing floor was removed and lowered to get higher ceilings. The resulting flats were light and airy and did not feel at all like a basement.
Mixed use schemes, meanwhile, present their own problems such as working around commercial premises, which are operational during the period when we are converting the floors above to residential and diverting services accordingly to minimize disruption.
The office is by no means dead but where the need exists to convert workspace into residential space, we address the unique challenges each project has with smart design solutions.