A special report into how relaxed planning laws are reshaping urban areas in Sussex
Our towns and cities are based around us: our needs, our lifestyles, our whims, our desires, our trends. Every building reflects the zeitgeist of its era: like Victorian townhouses with their grand facades displaying the wealth of the aristocracy; the ‘60s tower blocks emphasising austerity and functionality, and the millennial high rises capturing the emergence of new technologies. Our town centres are essentially 3D renditions of Britain’s modern history, from the beginning of urbanisation right through to the digital age today.
But underpinning all of that, rather unromantically, is one hundred years’ worth of complex planning legislation determining where we can live, where we can work, the shape, size and look of the buildings, and the nature of the infrastructure that connects them. These planning regulations are in place to support the local economy, keep communities happy and control issues such as pollution and urban sprawl. But, as with all paperwork, regulations can hold the process up. Applying for planning permission takes time and in some cases this can prevent much-needed change and growth in towns.
Today many of Britain’s High Streets are blemished with empty buildings and boarded up shop-fronts, spelling out the hard-hitting impact of the recent recession on thousands of small businesses. The convenience of Internet shopping and out-of-town shopping centres has left many High Streets in need of quick rejuvenation. But with so many retailers in dire straits and few in a position to open new stores, ‘quick rejuvenation’ is not something that could have happened under the former planning laws.
By 2012, the number of shop vacancies in the UK had peaked by an average of 14.6% per town. Finally, the government decided to take action by introducing new planning rules to extend rights to ‘change use without permission’. In other words, the rules were relaxed so developers who wanted to turn commercial spaces into residential properties could do so without battling through a web of planning bureaucracy. In the Budget’s Growth Review, Secretary of State for Communities and Local Government Eric Pickles argued:
“Many towns and cities have office blocks, warehouse and business parks needlessly lying empty, while housebuilding has fallen to the lowest in peace time history because the planning system has tied developers up in knots of red tape.
“By unshackling developers from a legacy of bureaucratic planning we can help them turn thousands of vacant commercial properties into enough new homes to jump start housing supply and help get the economy back on track. Councils already have powers to give greater local planning discretion and they should us them more to promote growth.”
He added that if all the vacant office space were converted into housing, it could potentially provide 250,000 new homes and save nearly £140 million over a 10 year period by removing unnecessary red tape costs.
The relaxed rules apply until 30 May 2016, and are in place to enable:
• Offices to be converted for residential use.
• Flexibility between High Street uses.
• Agricultural buildings to become a range of new businesses.
• Opening of new state-funded schools.
There have been objections to the new planning rules – 30 out of the 33 London boroughs and seven out of eight of the largest cities surrounding London applied for exemption on the grounds of ‘exceptional economic circumstances’. Commenting at the London Assembly, London mayor Boris Johnson expressed concerns that business owners in non-exempt areas will seek to cash in on the new lax regulations by selling up and relocating.
He said: “London is a colossal powerhouse of jobs and growth, and the motor of the UK economy. While increasing housing output is of vital importance, I am concerned that removing the exemption in our most thriving business districts could compromise both London and the UK’s future economic growth.
“London’s success depends on a rich mix of uses and more high value residential property in central London could upset this balance and change the area for good.”
He added: “Permitted development drives up the land value of employment space – even where property owners don’t convert, they will use it as a reason to increase rents, forcing businesses to close or to leave London.”
Other voices of authority agreed, with Matthew Hopkinson from the Local Data Company, which monitors High Street occupancy and vacancy rates, saying: “There’s no point converting [shops] to residential if you don’t have the jobs and infrastructure that make people want to go and live there.” he said.
“The reality is, if a place does not operate economically people won’t have the money to spend in shops.”
Victor Sye of Marshall Clark Commercial Property Consultants in Worthing argues that the biggest stumbling block when it comes to growth in Worthing is not building use, but infrastructure. He said: “The presence of a strong infrastructure is beneficial for unlocking land for development and enabling the free movement of freight and workforce alike.
“With the sea on one side, the major artery serving Worthing from east to west is the A27. It is widely acknowledged the A27 is totally inadequate for purpose and definitely fetters potential economic development in the Town.”
According to Victor, poor infrastructure is one of the main points of consideration that prevents businesses moving to Worthing in the first place: “A company we dealt with employing 50 staff recently discarded potential plans to relocate to Worthing in light of difficulties travelling into the town. They have decided to expand their existing facility instead.”
He added: “Worthing may continue to be a very nice place to live, but until the A27 is improved there is a minimal chance of attracting new businesses to the Town.
“The economic knock-on effect is that even though there continues to be a modest fall in unemployment to just below 3%, without new businesses coming into the area, the opportunities for job creation remains primarily in the care and hospitality sectors and the likelihood is that Worthing will remain the poor cousin in the regional economic family.”
Philip Johnson, Director of Locate East Sussex – a council-run business funding service, believes relaxed planning laws could even jeopardise the growth of the economy if developers turn a blind eye to the need for commercial property: “In areas where there is exceptionally high demand, particularly in Brighton, residential property prices have rocketed, so it’s understandable that some property owners might consider converting buildings for residential use – if planning laws allow.
“However, it is incredibly important if this is being considered, that attention is paid to the commercial for which these buildings were originally developed. It is critical that we do not lose the capacity to create jobs and wealth, just as the economy is starting to grow.”
Fears that developers could cash in on lucrative residential opportunities in Brighton have not gone unnoticed by authorities. In June 2014, Brighton & Hove City Council became one of the first in the country to be issued an article 4 direction to enable exemption from the relaxed laws in certain areas. This means that developers hoping to convert commercial properties in central Brighton, New England Quarter, London Road, Edward Street Quarter and City Park office sites have to apply for planning and be considered individually.
Councillor Jason Kitcat, chair of the Policy & Resources Committee, said: “We recognise the need for new homes in the city, but converting offices into housing in key employment areas means the space is no longer there to create the employment opportunities the city will need over the next 20 years.
“The city centre, New England Quarter and London Road area are very well located for business as they offer affordable workspace for new companies. Many creative, digital and information technology businesses are in these areas and the sector is growing at twice the national average. The government recognised this with a £5 million award to provide ultrafast broadband services to serve central Brighton.
“Allowing conversions to go through without planning permission also removes the right of local people to have a say on proposals. Some applications may well be suitable for conversion to some housing so it is important that we have the opportunity to negotiate a percentage of affordable homes to help people for whom buying or renting a home in the city is out of reach.”
Chris Oakley, Executive Chairman of Oakley Property, residential and commercial estate agents in Sussex, said that while he has noticed more offices becoming homes under the relaxed rules, the impact has not been as devastating as people feared when the 2013 legislation was first put in place. He said: “It has not been as significant as some people feared in relation to larger office buildings. In Brighton and Hove for example we have mainly seen older office buildings located in less well established business locations change to residential, but mainly the changes have been in relation to smaller former residential blocks with ground floor shops, where the upper parts have changed to offices and now they are reverting back to their originally intended residential uses. Those who feared the blanket loss of the office space did not factor in that obviously a lot of the office stock is let with tenants in occupation, so unless the change can be implemented by May 2016 the PD rights can’t be implemented.”
Chris believes the legislation has provided a boost to the local economy, commenting: “It has meant a lot of under invested buildings have been brought back into life and now provide homes. We have yet to see business driven out of the city in Brighton because of this, we are seeing rents increase slightly, but this is good news as the office market has been stagnant and this will now encourage developers to provide new space.”
Although the legislation will expire in 2016, Chris says there are talks to extend the rights. “I certainly think that taking the pain out of the planning process by allowing the market to determine the best use of a property is the way forward in a ‘light touch’ controlled manner,” he concluded.
Another positive – if only short-term – result of the new rules is a spurt of growth in construction across the South East, reported in September 2014 by the Construction Market Survey. In fact, the region’s construction workload is at its highest since 1994. As many as 78% more chartered surveyors expect to see a rise in workloads over the next 12 months, with 56% more respondents expecting to see profits increase, rather than decrease, and 65% more respondents expect to take on more people in response to the rising workloads over the same time period.
Commentating on the data, Alan Muse, RICS Director of Built Environment, said:
“Unprecedented housing demand, the bounce back from a very deep recession and government’s commitment to invest £36 billion in over 200 infrastructure projects is driving much-needed confidence across the industry, translating into UK workloads sentiment now standing at its highest level in two decades.”
Will relaxed planning laws pump life into sagging High Streets, or will it drive business out of town and drive up prices? Have your say by tweeting us @sussexbusiness