1. www.lawyer-monthly.com
ISSUE 63-1566 Legal Focus
The continuing establishment of prime central
London as a focus for the financial services
industry and the convenience of London as a
natural bridge between the USA and Europe
coupled with a hangover of lack of commercial
lettings stock from the 2008 financial crisis has
caused a major upsurge in demand in the West
End of London.
The shortage of commercial space has in part
resulted from significant increases in the value
of residential real estate coupled with the
conversion of commercial buildings to residential
notwithstanding any exceptions for central
London boroughs such as City of Westminster
and Kensington and Chelsea in having opted out
from the change in the General Permitted Order
2015 i.e. change of use from offices to residential
without the necessity for planning consent.
Allied to all of this in the shortage of commercial
space has been the continuing advance of
leasehold enfranchisement, particularly on
the Great London estates such as Grosvenor
(Mayfair and Belgravia), Howard de Walden
(Marlyebone) and Portman (between Mayfair
and Marlyebone) enabling further residential
redevelopment with enlarged freehold interests
at the cost of reduced commercial stock.
The continuation of low interest rates has fuelled
the debt market. Whilst the established big
retail banks may have closed their book on
development finance there has been a raft of
new sources from private banks and mezzanine
finance providers which have largely made
up for the shortfall that had been provided
by the major bank players. My firm continues
to endeavour to increase our relations with
financing sources both direct and indirectly so as
to assist clients in making their numbers work.
The lack of private housing stock and the
consequential cost of that remains a major issue
for a government initiative. Home ownership
remains the goal of so much of the population.
The extension of permitted development rights
to enable conversion of commercial buildings
to residential will not in my view solve this acute
problem. The proposed compulsory rights for
Housing Association tenants harks to Margaret
Thatcher’s ‘Right to Buy’. The movement to
protect the countryside remains an active lobby
and a vocal opposition to changes of use from
agricultural to residential and similarly the holy
cow of the green belt. Any government initiative
to create ‘New Garden Cities’ is in my view to be
welcomed.
Since my qualification I have seen radical
changes in the market. The establishment of
Canary Wharf as a recognised commercial
centre could not have been foreseen given
the absence of transport facilities that originally
existed and how it has succeeded in attracting
occupiers from the centuries old City locations.
The patronisation of the West End of London
for professional firms and others in the service
industries much of which was established when
businesses fled the bombing of the city in World
War 2 has over recent years been completely
reversed.
In terms of changes in the London residential
property scene and aside from the continuing
growth of enfranchisement, the reconversion of
houses from flats back into single occupation has
been a feature of residential development since
the 1980s offering single family accommodation
in prime Central London often with integral
gardens all of which is generally not attainable
in other continental prime residential areas. All
of this has increased the attraction of London
to foreign buyers. The Greek shipping magnates
residential real estate ownership has been
replaced by other European buyers, those from
the Gulf and increasingly, from the Far East
where there has been significant activity in ‘off
plan sales’. LM
David Conway
David Conway & Co
1 Great Cumberland Place
Marble Arch
London W1H 7AL
Here we look at some of the issues and challenges surrounding changes most particular to the London
commercial and residential property market with an exclusive article from David Conway. Qualifying
in 1970 David established his own firm in 1972 with an emphasis on real estate transactions allied to a strong
corporate specialism. In the course of his long career he has represented major public companies as
well as private companies in a range of investment and development transactions which have included
trophy properties such as the Trocedero Centre in Piccadilly Circus. He has also during his career developed
an established reputation in the field of leasehold enfranchisement representing clients in a number of
landmark decisions.
COMMERCIAL
& RESIDENTIAL
PROPERTY