This section looks at the key policies that impact on the availability of industrial land. We focus on land use and planning policies, as these have direct impacts on land supply. Of course, there are other policy areas, such as transport or housing policies, which effect on the availability of industrial land premises. For example, industrial businesses usually need to make and receive deliveries, so restrictions on freight and delivery vehicle access, or lack of loading space, can make premises earmarked for industrial use unviable for most industrial activities. We are exploring the issue of freight as part of our Freight and Deliveries research project.
Designation and release
Some planning tools are available to protect industrial uses. Many industrial sites are ‘designated’ – which means that local authorities can require that development proposals do not “compromise the integrity or effectiveness of these locations in accommodating industrial type activities.” 11 Designations were originally introduced to separate industries from other city activities, to prevent nuisances for residents, and to safeguard land for essential functions. Today around two thirds of industrial land is protected by ‘strategic’ and ‘locally significant’ status.
London’s experience of deindustrialisation, paired with a growing population and economy has meant that in the last two decades, the city’s industrial land (both occupied and vacant) has provided a valuable source of land for housing, offices, retail, cultural institutions and parks. Industrial land release, and in particular the conversion of industrial land to residential use, has been encouraged by London mayors and governments’ ‘brownfield first’ strategy to increase housing stock by densifying the inner city.
The pressures on London’s industrial land have been intensified by other political commitments that constrain land supply – such as housing targets, strict protections on development in the Green Belt, conservation areas, or opposition to taller buildings, especially in the suburbs and in the rest of the Wider South East. Many local authorities have felt they have no choice but to allow the release of industrial land, to even have a chance of meeting housing targets.
No net loss
The Draft London Plan published in July 2017 acknowledged the importance of industrial and logistics land for London’s economy in the face of diminishing supply. Research commissioned by the Greater London Authority (GLA) showed that between 2010 and 2015, London released industrial land three times faster than it had planned to – exceeding monitoring benchmarks set by the GLA in 2011. 12 In acknowledging this problem, policies E4-E7 of the Draft Plan sought to develop a framework to better manage the protection, release and conversion of designated land and thus make best use of existing industrial land. This included intensifying and co-locating industrial activities and working with local authorities elsewhere to substitute some of London’s industrial land capacity. Central to this framework was the ‘no net loss’ policy – a protection mechanism that sought to safeguard remaining industrial capacity by requiring that conversion of industrial spaces to other uses should be offset within London, except in a few exceptions.
But upon review the Secretary of State asked for the removal of the ‘no net loss’ policy, arguing that its removal was necessary for London to meet its housing targets and out of a desire to give boroughs more flexibility to identify industrial land that could released or redeveloped for housing. 13 This removal will make it harder to protect against the continued release of industrial land.
Some respondents to the London Plan consultation were also concerned that intensification was not going to happen on a scale required to make up for any release of industrial land. Intensification generally refers to initiatives that increase industrial floorspace. These include retrofits (for example by adding basements or small units to existing buildings), redevelopment, to create stacked industrial premises, or making existing uses more efficient (for example, through sharing yards). However, industrial tenants and developers made the point that intensification will not be suitable for all occupiers and their operational needs, and in cases where it can work, it can be very expensive – as building structures, access ramps and inability to phase development mean high upfront cost and risk. 14
According to a senior London politician that we spoke to, a further extension to Permitted Development Rights will have a major impact on industrial land in London. The extended Right, which was first introduced in 2017, allows offices and light industrial units to be converted to housing without planning permission. 15 The use of Permitted Development is controversial, since although it has contributed to increasing housing stock in London the quality of some of that new sock has been highly questionable and in addition it has reduced the space available to small businesses. 16 Extensions to these rights were introduced in 2020 to allow more light industrial uses, which now belong to a new and broader Use Class E (commercial, business and service) to be converted to residential.
The 2020 reform will impact on non-designated industrial land, such as smaller sites often scattered around London’s high streets, on the fringes of commercial areas and even within neighbourhoods, which make up over a third of London’s total industrial land. While strategic industrial locations (SILs) and locally strategic industrial sites (LSIS) have stronger policy protection, the PDR would also apply there for vacant buildings that previously hosted a Class E use.