Local Authorities Reject Central Government Plans To Convert Retail Into Residential Space

Retail to residential conversions in England have reduced by 17% in the past year.

According to newly obtained figures by Bootle Hatfield, the number of retail and office units/properties approved for residential conversion has fallen from 452 in 2017/18 to 376 in 2018/19.

Empty retail units are now at their most worrying level since 2015. The data also used figures from the British Retail Consortium which found that, on average, 10% of all town centre retail units were available in April 2019.

Currently, many retail parks and large supermarkets were built specifically as retail units to house shops and restaurants. However, the ‘Building Better, Building Beautiful Commission’ interim report claims that new build residential developments should be built around these areas to create a ‘mixed use’ community.

The interim report also highlighted the importance of using these empty retail spaces to help support the growing residential housing shortage.

The Bootle Hatfield report attributes the decline in retail to residential conversions to anxious local authorities reluctant to change the building use in the case of a future surge in the demand for retail units.

The report highlighted the increase in Permitted Development Rights (PDR) restrictions across areas of London which prevents the conversion of many retail spaces to residential use.

Dennis Ko, partner in the real estate team at Boodle Hatfield, said:

“There is an increasing acceptance that some peripheral retail property needs to be converted to other uses to prevent areas dying. These figures show that this simply isn’t happening on the scale it needs to.

“With the number of retail units standing empty around the country, it’s surprising that a growing number of councils are opposed to seeing new residential units replacing them.

“While it’s important to ensure the right mix of residential and commercial property, especially in town centre areas, disincentivising developers from creating new homes is unlikely to be the best way to do it.

“Developers often complain that the full planning process is slow, inconsistent and frustrating. Some will simply walk away rather than deal with that. It would be great to see the new Government make far reaching reforms to the planning regime. Much has been promised by several previous Governments, but the planning system still works to prevent a lot of vital residential development.”

How important will the transition of retail to residential property be in creating the 300,000 new homes by 2025.