Deregulation and space: The opening of new rent gaps via office-to-residential conversion in England

Abstract

Research on office-to-residential conversion has not thoroughly attended to the relationship between deregulation and space—failing to unveil different market-driven spatial relationships across English regions. Since 2013, the English government has allowed office-to-residential conversion without requiring permission from the Local Planning Authority. In the context of planning deregulation, this modification extended Permitted Development Rights, exempting certain developments from requiring Local Planning Authority permission. To date, no study has given a national econometric explanation for the spatial distribution of office-to-residential conversion under Permitted Development Rights. By applying a Spatial Lag Model, this research strengthens our understanding of the drivers determining the spatial patterns of office-to-residential outcomes between 2013 and 2023. This research unveils that the location in London and the difference between the highest residential and lowest office rent gap are the two predominant factors that explain greater conversion rates. It lays out two novel contributions. First, the significance of spatial dependency when addressing linkages between the office and residential markets vis-à-vis planning modifications. Second, it illustrates how potential rent gaps and the agency they trigger can motivate developers to drive rent gaps. This research reveals the spatial structures of financial logics that shape office-to-residential outcomes, with significant lessons for the deregulation of urban planning policy and its failure to create adequate housing and sustainable built environments for communities.