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28 October 2015

London firms struggling for premises as a result of planning rules

The Federation of Small Businesses (FSB) in Greater London is calling for the Mayor of London and candidates in the 2016 elections to commit to improve the supply of commercial premises for small firms in the capital.

Small businesses want them all to pledge action, as increasing numbers of businesses in London are struggling to keep hold of their premises due to the problems caused by ‘Permitted Development Rights’ which allow landlords to switch business property to housing. The FSB believes the Mayor should work with Ministers to promise a review of the situation, and to agree an action plan that includes legislative change, if required.

An FSB poll of its London members found over half (56 per cent) wanted business property costs (including rent, rates and availability) urgently reformed, listing the issue as critically important for any prospective Mayoral and Assembly candidates in next year’s coming elections.

The FSB wants to see Ministers protect small businesses facing termination of tenancy by those seeking to exploit high residential property values. This could be delivered through a sympathetic approach to approving Article 4 directions in affected areas across London.

The current relaxation of planning restrictions from office to residential is a growing problem. Evidence shows that it is now driving up the costs of doing business, disadvantaging local economies and undermining London’s status as a globally competitive city for small firms to start-up and thrive. Estimates suggest that as much as 225,000 metre squared of office space could be lost in Central London, equating to floor space for 47,000 jobs.

Sue Terpilowski OBE, FSB London Policy Chairman, said:

“These permitted development rights undermine the Government’s efforts to protect and revitalise high streets in the capital. The result is less mixed commercial and residential areas which in turn require consumers to travel further to get to work, placing additional burdens on London’s transport infrastructure. Safeguards need to be in place to ensure sufficient supply of commercial property for small firms.”

Martin Simmons, Managing Director of Marsworth in the London Borough of Harrow, said:

“In Pinner, West London, in the last two years, three office blocks that specifically catered for small businesses have been closed for redevelopment into residential property. In South Harrow, the story is the same, where four residential blocks either have been or are being built.  The result is that small businesses are being pushed out of the area.”

Mark Morreau, Photographer and Videographer has had to move from Tower Hamlets to Archway Tower, said:

“Along with seven other businesses here I'm being forced to relocate as our Landlord has decided to convert office to residential and reap the massive profits that can be made from that. So many landlords are doing this, and subsequently the price for small office space has soared. If this relaxation of the permitted development right for office to residential conversions becomes permanent it could spell the end for small businesses with needs like mine.”

Farshid Moussavi RA, Director of Farshid Moussavi Architecture, an internationally recognized architectural practice based in Westminster said:

"The provision of much needed housing should not come at the expense of equally needed diversity in enterprise, office stock for SMEs and historically significant office spaces that has made Westminster a desirable address for businesses. We worry that these losses are being justified by the trend of conversion from office to residential. Westminster has acknowledged this trend by signalling a change of direction in their planning policy to revert the loss of office stock as a consequence of conversions."