By Claire West

Making it easier to turn currently vacant or under used offices and shops into housing could create tens of thousands of new homes and provide a powerful boost to the economy, according to new research published by leading think tank, Policy Exchange.

The study — More Homes: Fewer Empty Buildings — calls for allowing vacant or under used retail, industrial and office space to be converted into housing, without having to obtain planning permission
for change of use.

Authors Alex Morton and Richard Ehrman show that despite the current housing crisis, there are currently 266,000 vacant commercial units, many of which have outlived their usefulness.

Alex Morton said: “Councils are holding back the conversion of vacant and under-used urban space into housing. Relaxing the planning rules to make it easier to convert commercial property would encourage investment, increase regeneration and create large numbers of jobs.

“We have rates of vacancy among commercial buildings nearly six times that of empty housing. That is a major indictment of our current system.

“Just because a building has always been a shop or offices shouldn’t have to mean it stays that way
forever.”

Problems with the current system are underlined by the huge discrepancy between the vacancy rates for commercial and residential property. Around 3% of houses are currently empty nationwide, while even in the economically-vibrant South-east England, office vacancies are running at 17%.

The plans would mean tatty shopping centres and parades could be a thing of the past. Many vacant retail or employment spaces are now no longer viable because of changing retail and business patterns. Internet shopping now makes up 10% of all purchases and is growing fast. Meanwhile changing employment needs mean older office buildings that are not suitable for open-plan spaces, air conditioning or computer-cabling are much less in demand.

Yet these premises, which might make good homes, are currently often left empty or even derelict because planning policy impedes their conversion to housing. The interests of existing business occupiers would be protected because only vacant or part vacant premises could be converted without
permission.

Conversion without the need for planning permission would only be to housing — meaning residents would still be protected against new fast-food outlets or off-licenses.

Many of the new homes expected to be built if the rules are relaxed could be ideal for first-time buyers finding it harder than ever to get on the housing ladder.

In 2008, some 16,000 homes were converted
from redundant commercial premises. By freeing-up the system, the authors expect that figure could be multiplied many times.

Key proposals in the study include:

• Any A (retail, eg shop) or B (eg offices) Class building or land that has been vacant for more than a year should be allowed to change to C3 housing without the need for planning
permission.

• If an A or B class building has been vacant for less than a year, up to 50% of the overall floor space should be allowed to convert to C3 in any five year period without the need for
planning permission.

• Village shops and pubs would be protected by only allowing bureaucracy-free conversions if there are other such businesses within a mile of the proposed conversion until the new
Community Right to Buy is established.

• Measures would be included to ensure that “windfall” planning gains are shared fairly
between the local community and developers using existing mechanisms like the Community Infrastructure Levy and New Homes Bonus