In this week's blog, we have picked up on a recent story published in The Guardian newspaper around a national pushback on PDR schemes, stating that dozens of businesses and individuals have presented an open letter to the government demanding an end to "office-to-residential conversions" across England, which their analysis has discovered has led to the removal of almost 28,000 planned affordable homes.
This is perhaps a fascinating point of debate, as one can imagine in the years post the pandemic, offices have been emptying faster than a New York minute - and as the workers have shuffled out into the brave new world of video conferencing, these open plan mahogany monstrosities, the cubicles of a bygone age, have been perfectly positioned to become the urban homesteads of a tomorrow. Photocopiers have been replaced with beds, desks with sofas, a wall here and there, and the gold rush began. This is itself what has made these schemes so attractive to SME developers. PDR's simplified mechanism of avoiding complete planning procedures can reduce entry barriers for small and medium-sized enterprises (SMEs) that may lack the legal, planning, or financial resources to navigate complex permissions. From an educational perspective, for a reader unfamiliar with the lingo, "Permitted Development Rights (PDR)" in England are a set of nationally granted planning permissions embedded in law through the General Permitted Development Order (GPDO). They allow specific building works, such as extensions, conversions, or changes of use, to be carried out without the need to apply for full planning permission from local authorities.
Initially introduced to streamline minor homeowner works and modest renovations, over time, PDR has been extended to include more substantial changes, including the conversion of office buildings into residential units (use-class change from commercial to C3 residential), which is what we have seen an explosion of as a direct result of the cultural changes post-pandemic. Supporters argue that this provides a faster and lower-cost pathway to addressing housing shortages, particularly by repurposing vacant or underutilised commercial buildings. Critics, however, such as the voices the article mentions, have questioned the quality, safety, and loss of affordable housing and community contributions (S106, infrastructure, etc.) that full planning would typically insist upon.
Under PDR, developers can bypass the lengthy and costly planning application process. For our clients, this accelerates delivery timelines and reduces associated fees, making projects more viable. An offshoot of this is the conversion of unused commercial space into residential units under PDR, which can make a meaningful contribution to the housing supply, particularly in the context of post-pandemic office vacancy, especially for older, low-rise office buildings, PDR offers a practical route to revitalisation.
So, what's the issue here?
A central critique, vividly articulated in today's Guardian article, is that PDR schemes bypass affordable housing requirements. Over 110,000 homes have been converted from offices without contributing to the affordable housing supply, resulting in the loss of nearly 28,000 affordable homes over 11 years. The article highlights numerous concerns, including homes that are small, poorly ventilated, dark, located in industrial or unsuitable areas, and lacking green space, school access, or adequate infrastructure. These are consistent with longer-standing criticisms of "rabbit-hutch" flats that fail to meet minimum space or habitability standards. A further concern is that PDR enables developers to avoid scrutiny, sidelining local democratic decision-making. Councils and communities could ultimately lose out because developers circumvent planning processes.
So what's our view?
While PDR has its drawbacks, there remains a need for responsive development mechanisms, primarily to support SME developers who can contribute to housing but often face resource constraints. If properly calibrated, for example, with stricter quality thresholds, clear space and ventilation standards, and location restrictions, PDR can support SMEs in delivering smaller schemes with reduced red tape. This will help activate capacity across the sector without defaulting to speculative, low-quality developments. We understand this has become a double-edged sword in England's housing landscape. On the one hand, they enable the fast and cost-efficient conversion of underutilised commercial buildings into residential units, which are attractive to developers, including SMEs, who aim to maximise speed and minimise bureaucratic hurdles. On the other hand, as the Guardian article illustrates, PDR-driven conversions without proper controls can bypass affordable housing, degrade living conditions, and erode community infrastructure.
By offering substantial development loans tailored for SMEs, we have a responsibility to help smaller developers overcome financial barriers and deliver high-quality, affordable housing, thereby flipping the paradigm on the PDR trope and transforming it from "free-for-all" conversions into a lever for responsible, inclusive urban regeneration. This isn't putting a bed in the stockroom and a party wall where the water cooler used to be; it's a new generation of urban dwellings that our sector is helping to build.
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