Redevelopment of offices into homes without the need for planning consent has long been an issue for the commercial sector with diminishing space resulting in increased rents, now the trend has hit the headlines due to the smaller residences which are being created.
Not only is there less commercial property available for business, but the converted homes are usually below the national minimum size with one apartment block under development in Barnet described as ‘dog kennel’ flats in The Guardian dog kennel flats and 40% smaller than the average Travelodge room.
Permitted development rights allow office blocks to be transformed into residences without the need for planning permission to enable homes to be built quicker to help alleviate the housing shortage.
Consequently, some developers are creating tiny studio flats some which are smaller than a budget hotel room. The 11-storey block of flats in north London has come under particular scrutiny after plans for Barnet House, were released by Barnet’s housing department and reported by The Guardian. The plans show 96% of the 254 flats will be smaller than the national minimum standard for a single person of 37m sq. The smallest flats will be just 16m sq which, according to The Guardian, is 40% smaller than the average Travelodge room.
One-bedroom flats in the local are on the market for around £180,000 with rents an average of £800 per month.
Other office developments have seen similar sized studio flats created such as in Croydon where floor areas were as little as 15m sq and the former American Airlines office block near Heathrow was turned into 288 flats.
Whilst the relaxation of planning regulations were introduced to encourage development of unused office buildings to ease the housing crisis, the fact that they don’t have to meet the minimum standards established in 2015 is giving cause for concern with housing charity Shelter and the Royal Institute of British Architects (RIBA) branding them ‘rabbit hutch’ and ‘shoe-box’ homes.
Converted offices accounted for almost 14,000 new dwellings last year which equates to almost three-quarters of the growth in housing supply.
The fear among housing experts is that quite often the flats are bought by couples who could potentially find themselves with their first child whilst living in these small dwellings. They also raise concerns about the developments as often not incorporating other facilities such as bike storage or a laundry room.
For the commercial property sector, as developers continue to convert offices into flats under permitted development rights, the reduction of office space to house businesses, vital for an area's economic well being, has wider repercussions if left unchecked. Rents are certainly being pushed higher beyond what we would expect from normal market forces as a result and in the long run, businesses may be forced out of the area taking their jobs with them.