Bristol has seen nearly half a million sq ft of office space converted into residential property – the highest rate outside of London – since 2013 when the government introduced new planning laws to make such changes easier, a report commissioned by the British Council for Offices (BCO) reveals.

Bristol City Council’s planning department has received 123 notifications from developers planning to convert office space since the rules were changed in May 2013, which together have the potential to create 1,995 new homes, according to the BCO’s ‘Permitted Development Rights: One year on from permanence’ report, undertaken by property consultants CBRE.

Between May 2013 when the planning changes came in and the Spring of 2015, the council had received 69 notifications for change of use to create 1,240 residential units, with average loss of office space of 12,500 ft², according to an earlier report carried out for the BCO in 2015. These units, based on Council estimates, equated to a loss of 870,000 ft² of office space.

Since then a further 54 notifications have been submitted. Of all 123 notifications, it is estimated that 54 per cent have already been implemented leading to the loss of more than 470,000 ft² of office space. Work on the remainder has yet to start.

While this may be good news for house buyers, it has led to a shortage of commercial space in the city pushing up rents for businesses. In Bristol city centre, some Grade B office rents have increased from £10 to £25 per sq ft per annum in just five years, according to one Bristol property expert.

This has led to some office to residential conversion proposals such as the Programme, formerly known as The Pithay, near Broadmead, being reviewed and delivered to the market as office refurbishments.

The report states: “This is a good example of where, if residential and office markets are broadly in balance, or conversion activity brings them into balance, further conversion may not occur, despite developers having the right to do so.”

The new ‘permitted development’ rules introduced in 2013 require developers to notify planning departments of their intention to convert office space. If local authorities do not respond, the developers have the right to proceed. Where local authorities demand further detail, they can then approve or reject the proposals but only on much narrower grounds than under the normal planning system.

So, although Bristol City Council has chosen to scrutinise every notification it has received, the vast majority are then approved.

While Bristol has seen particularly high levels of conversion, only outstripped by London, the permitted development rights have led to a rise in such schemes across England. Nationally the office development market has historically been able to outrun losses from conversion.

Mark Alker Stone, Chairman, BCO SW and Wales Chapter added:

“There is no denying that more housing is needed in Bristol, and the conversion of some older buildings which are no longer suitable as offices is a sensible solution. However, once office space is lost to residential development, it is often lost for good.

“This loss means that many Bristol businesses will not have access to office space of the right quality, in the right location, to succeed and drive growth.

“To ensure future economic prosperity, local authorities must take a more active approach to reviewing and approving notifications from developers in order to protect the workplaces needed by local businesses.

“Bristol now lacks good quality commercial space although the permitted development rules are just one of many causes - with the key issue being the lack of new development in the city.”

The national picture

Between 2001 and 2015, office stock in England has increased by an average of 7 million ft²/year, while conversions to housing have averaged 2.6 million ft²/year. However, in 2014 following the implementation of the rights, an estimated 6,574 homes were created from offices, leading to a loss of 5.3m ft² of office space. The creation of 11,155 homes from offices resulted in a 9m ft² loss of office space in 2015, almost double the figure from the previous year.

For more about the BCO, visit the BCO website (www.bco.org.uk).