Office Block Conversions: Essex

Sarah Jones Excerpts

Thursday 13th February 2020 Westminster Hall

[Sarah Jones (Croydon Central) (Lab)]

It is a pleasure to serve under your chairmanship, Sir Graham. I will stick to the subject. I congratulate the right hon. Member for Harlow (Robert Halfon) on securing the debate. It is timely, given the “Panorama” programme that we saw a couple of weeks ago. I hope that if he has not already done so, the Minister will watch it. It was very powerful. I also congratulate my hon. Friend the Member for Luton South (Rachel Hopkins) on her contribution pointing out some of the problems with permitted development, not least of which is air quality. That had not yet been discussed, and it was interesting.

Permitted development is a symptom of the way the housing system has broken. The principle, as the right hon. Member for Harlow said, of making it easier to build housing, is clear, but the consequences since its introduction are obvious. It has not increased affordable housing, which is what we would hope for. The ad hoc nature of the development can be seen in Harlow, Luton and Croydon, and in Croydon it has meant overdevelopment of office space. There is now a gap, because businesses that want to come into the area cannot, as everything has been converted through permitted development. Also, a lot of quite unsavoury people are making quite a lot of money. That was obvious in the “Panorama” programme about permitted development in Harlow.

I think that permitted development was introduced to allow developers to bypass the normal planning process. It gets people off the hook in spatial terms, and with respect to the need for windows in flats, and it makes it possible for unsanitary, unsafe and unpleasant conditions to develop. Plenty of people have written about the issues and brought them to our attention, and many of the examples used are from the right hon. Gentleman’s constituency. Vicky Spratt has done a lot of work on the matter in the i newspaper, and has raised cases, including one in my constituency, where leaseholders have bought such properties through Help to Buy. So it is not only the planning situation that has made what we are talking about possible; the Government are also funding it through Help to Buy.

The Shelter report that came out of the “Panorama” programme was helpful and showed the scale of the problem. Inside Housing has been good at highlighting the issue, and has talked about the warehousing of poverty by the housing system—something that the right hon. Gentleman referred to. A good piece of work was done by Tom Copley in City Hall in London showing that only 0.4% of the new homes built under permitted development in London are affordable. More than half of the permitted development homes in London are smaller than the minimum space standard that one would hope to see.

Last year 12,000 homes were created under permitted development, and there were 5,000 in London. There were more than 600 in my borough of Croydon, but I will not talk too much about that. The Grenfell Tower fire showed how flawed the building regime system is. Permitted development is one part of the system that has created the problems described so well by the right hon. Member for Harlow. In total, 54,000 new housing units have been created by conversion from offices since 2016. However, in research by the Local Government Association it is estimated that more than 10,000 affordable homes would have been created under the normal planning process, but have been lost, because they were not created under permitted development. That is why Labour has committed to scrapping permitted development—not because we do not think offices should ever be converted to residential use, or because we do not want more homes to be built, but because we see the consequences of permitted development, which are grave.

The Royal Institution of Chartered Surveyors found that permitted development has

“allowed extremely poor-quality housing to be developed”,

with only 30% of homes built through permitted development meeting national space standards. As the right hon. Member for Harlow pointed out, in recent weeks Shelter and “Panorama” have exposed the impact of a kind of slum housing on vulnerable people who are placed in his constituency and elsewhere. The investigation revealed how different elements of the housing crisis are layered together to create a truly awful situation. Councils that already suffer the impact of record low investment in social housing under the present Government simply do not have the supply of genuinely affordable council housing. There are more than 1 million people on council waiting lists, and multiple failures in the private rented sector—whether it is the growing number of no-fault evictions, spiralling rents or poor quality accommodation —mean that more and more people are left with nowhere to go but temporary accommodation. Councils are left to try to find somewhere to house them.

Shelter’s investigation revealed that 90% of the £1.1 billion spent by councils on temporary accommodation went to private landlords and letting agents. The research revealed how investors were purchasing office blocks, which they would then convert to temporary accommodation without local authority planning permission, before charging them out back to councils at huge expense, despite the sub-par standards. In one case that was highlighted by Shelter, a temporary accommodation provider bought a permitted development block for £8 million and leased it to the council for £1 million a year for three years, before selling it to the same council for £13 million, making a 50% profit, plus millions in rent.

I will not talk in much detail about Croydon, because we are mostly discussing Essex, but it is the epicentre: it has more permitted development units than any other part of the country. I have dealt with many cases of substandard accommodation, including Delta Point, Canterbury House and Green Dragon House. Those have been converted, and there have been all kinds of issues. One instance speaks to the point made by the right hon. Gentleman about the buildings being built for paper, not people: we had a block with a boiler system that was intended for people using the office space in the day. It was nowhere near good enough for the hundreds of people living in the block, so it failed and people went weeks without water and heating. We had to step in to try to solve that problem.

Those of us here today—we are quality, rather than quantity—are saying that the system is flawed. The Secretary of State has accepted that it is flawed. The Royal Institute of British Architects has called for an end to the scandal of families living in homes that are smaller than budget hotel rooms. I hope the Secretary of State is having some second thoughts. The consultation was originally introduced to look at expanding permitted development, but he has made remarks in the Chamber and elsewhere that suggest he understands that there are problems that need to be fixed. The nature of retail and office space is changing, and traditional high streets are changing, but converting everything into residential at great speed with no quality is not the way to help our high streets.

From our perspective, permitted development as it stands is better off scrapped, but if we are not going to go that far, I have some questions for the Minister. Does he accept that this is a significant problem, which is affecting a lot of people? If so, what does he propose to do about it? When can we expect the result of the consultation, and how does he see permitted development fitting into the solution to the huge problems of the housing crisis, examples of which we have heard about today from Harlow, Luton and Croydon?