Will Office to Residential Policy Stifle London Startups?
With 30 out of 33 London Boroughs requesting exemption from the new office-to-residential policy, itΓÇÖs safe to say that the move is far from popular. Among their main objections is a serious concern that it will stifle the development of small businesses and startups in the capital, by depriving them of affordable office space.
Camden Council is one of those awaiting a decision; its case for exemption expresses the concerns of many London boroughs regarding the potential impact on small businesses and startups;
ΓÇ£The permitted development changes proposed are most likely to result in the loss of older commercial premises. These are especially suited to providing affordable accommodation for new business start-ups and small businesses. The loss and absence of premises suitable for such business will suppress the development of a key component of the capital and countryΓÇÖs future economic growth.ΓÇ¥
A similar case has been put forward by Harrow Council, whose Heart of Harrow Intensification Area is heavily reliant on small business. In fact, 78% of businesses in the borough are small businesses employing no more than four employees; 20% of these were formed in the last two years, making small businesses a key driver for growth in the area.
ItΓÇÖs not just Harrow and Camden; small businesses and startups are playing a crucial role in boosting the economy nationwide. According to statistics from Companies House, 484,224 startups registered in 2012, representing an increase of almost 10% on the previous year. If this trend continues (and there is every sign that it will), cities across the UK ΓÇô and particularly London ΓÇô are likely to see an increased demand for small office space over the next few years. Many of the office buildings standing vacant today could be ideal for meeting this demand.
In those areas of London which fail to get an exemption, by the time this demand is realised the office buildings are likely to have been converted into residential property. By contrast, for those boroughs which succeed in securing an exemption, the planning permission process will allow for careful evaluation of vacant office space against future borough-wide development plans. Only then will the buildings be turned over to residential developers.
With the new policy to come into effect from April, London boroughs should know in the next few weeks whether their exemption requests have been granted. However, it may be several years before the impact of the new office-to-residential policy can be fully understood.
Is the new office-to-residential policy a smart move or a misstep? Share your opinion in the comments below.