The main draw for British town centres was the high street. Sadly, this is no longer the case and town centres are in decline. The high streets are devoid of life, vast empty stretches of vacant buildings of what were shops, banks, department stores and malls.

Cue a potential saviour – Permitted Development Rights

There has a been a huge backlash against PDRs since they were introduced in 2013 with the aim of converting vacant office spaces into much needed housing stock. While 42,000 non-residential units have been converted into homes, there’s been intense criticism of the build quality of the converted properties. This also has meant lending is hard to come by to finance development based on PDRs.

Labour’s Shadow Housing secretary said PDRs have allowed developers to “bypass the normal planning process by converting commercial spaces into housing without the consent of the council and local community”.  John Healey also says, “PDRs give developers a get-out from requirements to provide affordable housing and meet basic quality rules such as space standards creating ‘rabbit hutch’ flats.”

However, Permitted Development Rights could still provide the answer to the housing problem and arrest the decline of the UK high streets – if we can learn from the failings of the office to residential conversions in the past 5 years and not allow for a free-for-all of poor-quality homes.

PDRs for retail to residential conversions can not only reduce vacancy but also inject life back into our perishing town centres, making them once again a thriving focal point for social and business life.

The government intends to bring forward a range of reforms, introducing additional flexibilities for businesses. This will allow for the ‘shops use class’ to be amended to ensure it captures current and future retail models, as well as permitted development rights to allow for retail shops to change use to an office or residential use.

The Secretary of State for Housing, Communities and Local Government, James Brokenshire plans to publish “Better Planning for High Streets”. This will set out tools to support local planning authorities in reshaping their high streets to create prosperous communities, particularly through the use of compulsory purchase, local development orders and other innovative tools. Stay tuned as we will provide an update when the report comes out.

We should imagine these new Retail-to-Residential conversions as mixed use properties that could signal the dawn of a new day for town centres. As councils, landlords and occupiers embrace the popular ‘work, live and play’ ethos and reinvest in the high street, reinvigorating it as a complete community hub incorporating housing, leisure, business, health and education.

The Property Finance Group specialises in development finance and commercial mortgages and have access to more than 75 development lenders right across the capital stack; senior debt, stretched senior, mezzanine funding and equity.

A landlord looking to develop a vacant retail site or change the use of class at the end of a tenancy using Permitted development rights can expect a true end-to-end service from Property Finance Group. With over 20 years of funding experience we know the market better than most.

With well thought out and executed permitted developments, we may yet put life back into our beloved towns and high streets.


16 May 2019



Photo Credit: Viktor Forgacs