A short while back we reported on how according to a report published by CBRE in collaboration with the BCO, office-to-residential conversions - which are now being undertaken at an increased rate under new legislation concerning Permitted Development Rights - are beginning to have something of a negative effect on the city’s commercial property market as more and more office space is lost in favour of housing. Now a new report published by the London Assembly has emerged which only serves to further drive the point home.

The London Assembly Economy Committee’s report, titled ‘Helping SMEs to Thrive’, examines the mounting challenges faced by SMEs based within the capital in the hope of working towards a viable solution, as well as making recommendations concerning potential remedial actions to the Mayor of London himself, Mr Sadiq Khan.

The report highlights how between 2001 and 2015, 16% of London’s industrial land was lost, and goes on to warn that as much as a third could be lost by the year 2041 if current trends continue. The relaxation of Permitted Development Rights has had a clearly visible affect, with 1.47 million square metres of office space being converted for residential use since 2013. In outer London specifically it is speculated that up to one-fifth of available workspace could be lost to similar conversion schemes.

However while supply plummets, demand for flexible, well-connected workspace in the city continues to increase. This in turn serves to drive up prices, which is harming SMEs in particular as affordability is of course a key concern for such companies.

In light of this the report not only sets out the challenges faced by SMEs, but also offers some advice on how such businesses can thrive, such as suggesting co-working models as a cost-saving measure, before proceeding to make recommendations to the Mayor of London directly regarding what the London Assembly believe he can do to help. These recommendations include:
  • Look into creating more flexible workspace in London by using available space more smartly. This will help reduce business overheads for micro and start-up businesses.
  • Commission research into the reasons why businesses are leaving London, identify which types of businesses are moving and the impact this has on local communities.
  • Bring together innovative planning policy by local authorities to create new affordable workspaces for SMEs.
Fiona Twycross AM, author of the report, said in summary, “SMEs are the life blood of London’s economy and our local communities. Yet, they are struggling to find work space that is flexible, affordable and well-located. The Mayor of London needs to address this issue to ensure the continued success of this city. We need concrete proposals to maximise affordable workspace and to fully understand why SMEs are leaving London. The voices of micro and small businesses must be heard when it comes to shaping the city.”

Sam Bonson

Sam is an aspiring novelist with a passion for fantasy and crime thrillers. He is currently working as a content writer, journalist & editor as he continues to expand his horizons.
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