A Tory tweak to planning laws padded property developers’ profits while worsening the UK’s housing crisis.

openDemocracy analysis found that the introduction of the controversial “permitted development” policy in 2013 has meant there are approximately 25,000 fewer homes available for some of the UK’s most vulnerable families.

Under the policy, housing developers do not have to seek full planning permission from councils to convert commercial buildings like offices and shops into homes, which means they are not subject to the usual planning requirements that a proportion of new homes built must be “affordable”.

More than 100,000 such units have been converted since the policy was introduced.

Councils in England typically require anything from 25% to 50% of new homes in a development to be affordable, or order developers to put up cash towards the building of other affordable homes.

Some 25,707 affordable homes could have been built if the 102,830 conversions allowed under permitted development rights between 2015 and 2023 had been subject to a typical 25% affordable housing requirement.

The true number of lost affordable homes as a result of the legislation could be even higher because statistics only go back to 2015, two years after the reform was introduced, while some councils such as those in London require higher levels of affordable housing.

Councils and housing campaigners say the “permitted development” legislation has also led to poor quality housing because developers are not subject to the same scrutiny from councils they would get if they had to obtain permission to build.

Mike Kiely, chair of the Planning Officers Society, said that when the law was first introduced some of the homes created were smaller than garages and had no windows.

The government tightened requirements for homes created through permitted development rights in 2020 after a report it commissioned found that 77% of conversions did not meet national space standards.

But Kiely says the changes haven’t stopped developers creating poor quality homes in unsuitable locations.

“There’s more to providing a decent home than those metrics,” he said. “You’ve still got housing for families in the middle of industrial estates with no public open space. It’s absolutely shocking and they should be ashamed of themselves.”

The Local Government Association, which represents councils in England and Wales, has called for permitted development rights to be scrapped to “ensure all conversions and new developments contribute to the delivery of desperately needed affordable homes across the country”.

The association said it did not know of any examples where affordable homes had been created through permitted development rights and that it was unlikely developers would have done so.

The government says homes must be rented out at least 20% under the market rate to be deemed “affordable”. In practice, the definition can encompass everything from controlled social rents to 80% market rents or even shared ownership. Affordable housing stock can only be built and given out by registered providers of social housing.

Around 340,000 new homes need to be supplied in England each year, of which 145,000 should be “affordable”, according to one estimate commissioned by the National Housing Federation (NHF) and Crisis in 2019. 

Although there has been an increase of 361,560 “affordable” rent homes since 2012, the number of cheaper social rented homes has fallen by 225,102.

Unlike affordable rent homes, which remain out of reach for many of the people on housing wait lists, social rented homes are let at 50% of market rent. The housing minister Lee Rowley was recently criticised for conflating social and affordable housing.

Currently, only conversions up to 1,500 square metres were allowed under permitted development rights. But the government announced on Tuesday that it would table new legislation scrapping the limit entirely to allow commercial buildings of any size to be converted without going through the full planning process.

The Department for Levelling Up, Housing and Communities has not responded to requests for comment.