"While Labour has not yet published formal proposals regarding PDR, several scenarios are being speculated within the industry"
- Andy Jones - LRG
The use of Permitted Development Rights (PDR) to enable change of use from commercial (or other) uses to residential is essentially a Conservative Party policy.
Following the introduction of this fast-track option for the creation of new housing units in 2013, the uptake has been considerable. Between 2015/16 and 2022/23, 102,830 new homes were delivered through change-of-use PDRs according to government figures.
The vast majority of these homes (89%) were created through the conversion of offices and other commercial, business and retail units and new homes created through change-of-use PDRs made up around 6% of the net additional homes delivered between 2015/16 and 2022/23.
PDR is extremely popular with investors: these rights allow certain types of property development or changes of use to proceed without the need for full planning permission. This streamlines the development process, saving time, reducing bureaucratic delays, and lowering associated costs. Essentially, PDR offers a streamlined, cost-effective approach that enhances the profitability and scalability of medium to large-scale property investment strategies.
Will any of this change under the Labour government? Labour has historically been critical of PDR, citing concerns over housing quality, local authority oversight, and the broader impact on communities.
However, it seems likely, given what we know of government planning policy to date, that to meet the extreme housing need and the government’s own ambitious housing targets (which Keir Starmer himself has referred to as ‘an almighty challenge’), the government will need to use every tool in its toolbox.
On this, I anticipated that permitted development rights would not only be retained but strengthened. In fact, in January, the government launched a consultation on broadening the scope of rural PDR.
It may be that rather than scrapping this very lucrative source of housing delivery, the government looks to address quality concerns which have been well-aired in the media. For example we may see changes in regulation to raise standards, but essentially I see a leveraging of PDR to deliver more housing.
While Labour has not yet published formal proposals regarding PDR, several scenarios are being speculated within the industry. These include the possibility of mandatory quality standards for PDR conversions; potentially more power to local authorities through enhanced Article 4 Directions or other mechanisms requiring local approval for PDR schemes; increasing the requirement for affordable housing in any new scheme, and an increase in sustainability and affordability requirements. While far from certain, these potential changes align with Labour’s broader focus on housing quality, community empowerment and sustainable development.
In the meantime, from the small-scale, often amateur landlord – perhaps someone who has inherited a property or has a unit surplus to requirements – to major investors, PDR can result in an excellent return on investment. Any restrictions or rollbacks could fundamentally alter the economics of an investment. Securing opportunities sooner rather than later under the existing framework may pay off for a variety of reasons.
Property professionals must remain agile and stay informed. Key steps include engaging professional consultants and legal experts to understand the nuances of local authority attitudes toward PDRs will be crucial. This will better enable investors to be familiar with any changing policies, also to anticipate changes and adapt strategies accordingly.
