Retail to residential conversions down despite increase in retail vacancy rates

Wiseman Admin2019, Commercial, PropertyLeave a Comment

According to the latest official figures, the number of retail to residential conversions fell by 17 per cent in the last year in England, despite Government backing.

The data showed that the number of retail properties approved for conversion to residential property has dropped from 453 in 2017/2018 to just 376 in 2018/2019.

This comes despite British Retail Consortium data revealing that town centre retail vacancy rates hit 10 per cent in April 2019, the highest level since 2015.

Converting empty retail units was proposed as a solution to the issue of long term empty retail units, with the Government setting a target of 300,000 new homes by 2021. However, research from Savills found that they are expected to fall around 40,000 short of that mark.

Industry experts are concerned about the drop in conversions despite the sharp rise in vacant retail space during recent years, as well as the recent reports that some councils are starting to restrict conversions.

It is believed that developers are being restricted from using the Permitted Development Rights’ (PDR) system by several local authorities. This process allows developers to convert the commercial property to residential use without a full planning application.

The PDR system was introduced in 2013 as an incentive for developers to convert disused commercial property into residential housing. However, some authorities have begun to restrict its use in the hope that the retail market rebounds.

In places where these restrictions are in place, developers are being forced to go through a full planning approval process, increasing costs and slowing down the process significantly.

There is some hope in the industry that the new Government will look into reforming the planning regime in a bid to tackle retail vacancies.

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