Converting sites like car parks, empty shops and offices to homes could support central London’s recovery from the pandemic.

This is according to a new Centre for London report which cautions against “unfettered” changes of use and puts forward recommendations to ensure that increases in housing supply are carefully planned and controlled to protect the city centre’s economic and cultural functions.

The report, Remixing Central London, argues that if demand for some types of shops and office space remain below their pre-pandemic average, then creating mixed neighbourhoods – with homes alongside offices, shops and leisure spaces – could be beneficial for the city’s centre. But the report also highlights the risks of converting commercial spaces to residential – such as greater tensions with residents and reduced space for future businesses and puts forward policies to mitigate these. The recommendations include changes to planning policy in favour of buildings that can be adapted over time, and introducing a requirement for estate agents to inform prospective residents about the opening hours and potential for noise from nearby businesses to avoid conflicts between groups.

The research highlights the economic and cultural importance of London’s centre and how its functions have been changed by the pandemic and longer term consumer trends: central London is home to 40 per cent of London’s jobs and 25 per cent of its businesses, and contributes nearly half of London’s output – and more than one-tenth of the UK’s. But recovery has been slow as visits to city centre offices and shops remain below their pre-pandemic average and many retailers have closed or reduced their floorspace. Changes to working patterns have resulted in a lower take-up of office space in some areas, although in others it has been slowly rising – driven by demand for “prime” office space.

Considering these trends, the report questions the appropriateness of planning protections which limit residential development to support business functions but also argues that government must not allow “unfettered” changes of use from business to residential through permitted development rights. In many cases, the report argues that the best approach will be to create mixed-use neighbourhoods with homes plus office, retail and leisure uses.

Looking at the potential to change uses in central London to develop mixed-use neighbourhoods, the report recommends that planning authorities should prioritise sites that would not compromise the integrity of high streets by not interrupting existing rows of shops, or by converting those buildings that are likely to see less demand in the future such as car parks. It also suggests “subprime” offices might be well suited for conversion as they are currently in lower demand.

However, to ensure that property use remains flexible so that London can continue to respond to changing national and global needs, the report recommends that planning authorities should require property owners to manage buildings and sites in a way that enables them to be redeveloped later – including a presumption in favour of rents rather than private ownership for residential uses.

To reduce the likelihood of tensions between residents in any new homes and businesses, the report recommends that national government should require estate agents to inform potential buyers and renters of residential property about the characteristics of nearby businesses. This should include information on opening hours, delivery hours and the potential for noise – so that residents can make an informed choice when moving.

And to ensure that central London can be home to a varied population and strong communities, the report recommends that planning authorities should require all major residential developments to include a mix of different-sized homes to make central London an attractive and attainable place to live for a wide range of residents.

Josh Cottell, Research Manager at Centre for London said:

“Predictions about the capital’s future range from the total abandonment of offices and restaurants to the rapid return of workers and shoppers alike.

“Much of central London’s success as an economic and cultural hub has been due to its rich mix of businesses, existing alongside a variety of institutions, residents, commuters, and visitors. These characteristics need to be protected, but we also need new approaches to help the area recover from the negative impacts of the pandemic.

“Enabling more people to live in the city centre could be part of the solution. Residents who spend time in their local area not only spend money in the local economy – they are also likely to play a “stewardship” role in their neighbourhood and add vibrancy to an area.

“Getting this right is critical: central London contributes nearly half of London’s output – anything that affects its economy will also impact the rest of the country.”

Ruth Duston, OBE, OC, CEO of the South Westminster Business Alliance said:

“With London facing some of the most significant challenges – and indeed opportunities – in a generation in the wake of the COVID pandemic, Brexit and a dynamic Government policy agenda, it’s essential we work in partnership to shape a more resilient and vibrant city. As the UK’s only global city it’s vital that London maintains its international competitive edge, and businesses across London are determined to secure a successful recovery.

“The way we interact with the city is changing – perhaps permanently – but we can’t make knee jerk decisions. To get the mix of uses right in the CAZ a flexible and pragmatic approach is needed and research pieces such as this will help inform future work and policy decisions.”

Alexander Jan, Chair, Central District Alliance and Hatton Garden business improvement districts Chief economic adviser, London Property Alliance, said:

“Whilst there may not be a universal view of what the residential, business and cultural mix of the CAZ should be, as a resident and someone who has worked in central London for thirty years,  I know that the energy, diversity and vibrancy of the place is what makes it attractive to all those with a stake in its future. Those things come at least in part from strong residential communities with a long-term stake in the heart of the city.

“With London facing headwinds in areas such as worker shortages, a rising cost of living for many, cuts to transport funding and begrudging central government policies more generally, the CAZ is evolving.  This research forms a is vital contribution in helping us to think about what the best policies and ideas are for the capital.”

Charles Begley, Chief Executive of Westminster Property Association, said:

“Accelerated by the pandemic, the way we work and spend our leisure time is evolving. The critical role of offices in supporting the collaboration and creativity of workers is evidenced by the rapid rebound in values of the highest quality office space, whilst lower grade space and retail, particularly in more peripheral destinations, is looking increasingly untenable.

“Thoughtful planning of more mixed-use neighbourhoods could, if executed correctly, help create a more vibrant and resilient city for the future. This paper is an important step in trying to understand how planning policy can address this challenge, without eroding the commercial success upon which central London is built.”

ENDS

Notes to editors

• Centre for London is the capital’s dedicated think tank and a registered charity.
• This research has been sponsored by Central District Alliance, Primera BID and Westminster Property Association
• The press release refers to ‘Central London’ meaning the Central Activities Zone.