The Government’s Plan for Retail-to-Residential Conversions

Back in December, we blogged about the Government’s proposals to allow retail-to-residential (retail-to-resi) conversions as a way to revitalise high streets. The idea is that empty shops are blighting town centres, and turning them into homes could bring people—and trade—back into urban areas. The proposals went out for consultation, aiming to let developers bypass permitted development rights and convert empty Class E properties into housing. It’s a persuasive argument, but it has significant flaws.

The Risks of Giving Developers a Free Hand

Retail-to-resi conversions could help increase housing supply, but when these plans were first proposed, we cautioned against giving investors and developers too much freedom. While more homes are needed, this shouldn’t come at the expense of quality, good design, proper light and space requirements, or a healthy mix of use classes.

British Property Federation Raises Concerns

This week, we were pleased to see the British Property Federation (BPF) echoing our concerns. The BPF warns that retail-to-resi conversions could actually worsen the decline of high streets rather than improve them. Their argument is that the new permitted development rights (PDR) may lead to developers automatically prioritising residential projects instead of considering the best use for empty retail spaces.

A Risk to High-Quality Investment

With media attention often focused on poor examples of PDR homes, the BPF fears that responsible developers could find it harder to bring forward high-quality investment. If retail-to-resi is pursued without proper consideration, there is a danger that town centres will lose their commercial vibrancy rather than regain it.

Not All Retail Spaces Are Suitable for Housing

There are many reasons why department stores and low-rise retail developments may not be ideal for conversion into housing. Additionally, other types of town centre development—such as independent businesses, co-working spaces, and cultural hubs—could be pushed out if there is an overwhelming shift toward residential use.

A Need for Diversity on the High Street

The BPF highlights an important point: an unchecked push toward housing could impede the growth of lower-value but essential uses. Independent retailers, childcare facilities, and community hubs may struggle to find space, even though they are vital for giving high streets a unique identity and a renewed sense of purpose. We couldn’t agree more.