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Loss of open workspaces a blow for London’s creative start-ups

by Dominic Hamlin

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Having already learnt this month that London is set to lose office space equivalent to 150 Wembley pitches, the latest news is that the permitted development rights (PDR) have now become permanent. This scheme allows for developers to convert offices into housing without planning permission. These residential plans were originally temporary when introduced in 2013 but have now taken a step up as the government attempts to address the growing concern with the lack of housing in London. The process is expected to enhance areas of the capital as well as the economy but the issue is whether this benefit is at the expense of London’s start-up businesses.

Whether residential or commercial, property prices in London are exorbitant and therefore it is crucial for small businesses to keep costs low when looking for a place to rent. Open workspaces are a way for start-ups to do this with the advantage of not only limiting expense but also networking with like-minded individuals. With flexible terms, shared costs and business support, a vast amount of small businesses are thriving off of the open workspace culture. Creative industries occupy the majority of these types of offices and their contribution to London’s economy cannot be ignored. Analysis of the figures show that the Gross Value Added (GVA) of the creative industries in 2012 was £34.6 billion which is half of the UK total of £72.7 billion. The figures highlight the significant impact the creative industry has on the economy, yet the government’s decision to make the transition from temporary PDR to permanent PDR suggests that they are not enough to derail the aggressive residential plans.

Open workspaces represent a certain creative culture, a way to get your foot in the door while avoiding outrageous costs and managing to maintain environments conducive to a small businesses objectives. An example of one of these spaces is the Camden Interchange Triangle which offers a large co-working space that provides business support, networking links and events. These types of open workspaces essentially nurture the creative start-up at its infant stage and the worry is that seeing the growth of these incubators potentially stunted will be a setback for the creative industry.

The government’s priority is to increase the amount of housing to keep up with the increase in population and the reality is that this aim overrides the consequence of PDR on the creative industry, even if this consequence has already amounted to a loss of over 1 million square metres of office space. It is however worth noting that developers have not been granted a free for all. Exemptions are in place to prevent the loss of office space in some of the most profitable areas of the capital such as the City of London’s financial district and Tech City. In these areas full planning permission needs to be granted in order to convert office space to housing. Still, even these exemptions are set to expire in 2019 leaving the core of London’s creative industry even more vulnerable to housing plans.

The complications with the lack of housing in London is an eminent and continually growing problem that the government will certainly struggle to address. One would hope that with the use of careful preparation, the problem can be tackled by the government and the Mayor of London without a huge dent being made in the productivity of start-up businesses. With the rise of the creative industry in the past decade, the availability of open workspaces have helped nurture and birth some of the most successful creative companies in London. There has already been a significant amount of compromise on the side of creative start-ups but they will hope in the near future that more caution will be placed on PDR plans to prevent creative entrepreneurs from being at a loss.

Written by Dominic Hamlin


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