As property prices boom affordable workspace matters too

Affordable workspaces are just as important as affordable homes when creating sustainable communities argues Susan Ralphs, CEO of The Ethical Property Company.

In the drive for more affordable homes, the government is going to relax the planning regulations around developing brownfield sites. Whether or not this will be more effective than the local authorities actually building more homes is debatable. However, I want to make a plea that affordable workspace is not forgotten in this debate.  

Rightly, we hear a lot about the need for affordable homes, but affordable workspace matters too. For those seeking somewhere to live, the booming residential market means that many people have lost hope of owning their own home. I live in Oxford, which has been named the most expensive city to live in, when comparing average house prices with average salaries. Not only does this mean that it’s desperately hard for those in Oxford to afford anywhere decent to live, it also makes it very hard for employers who want to attract staff from outside Oxford.

What gets much less attention, but which is also a by-product of the property boom, is the shortage of affordable workspace. The Ethical Property Company sees this need within our clients who include the voluntary, social enterprise and small business sectors. The enormous boom in commercial property prices, partly fuelled by the recent relaxation of the restrictions on permitted development, which has encouraged the conversion of offices to residential, makes many central London locations out of reach of smaller organisations. These organisations are crucial to economic growth and community cohesion.

For example, for the 24 months leading up to Q1 2015, rents in London’s city fringe increased by between 22%-25% and even central Manchester rents increased by about 7% in that period - way above inflation.

What does this mean in practice? Organisations have three choices:

  1. Either they have to move to more peripheral, less convenient locations – often with poorer access to public transport, which disadvantages their often lower paid employees as well as those who benefit from their services;  or 
  2. They have to work in more and more cramped conditions, with the inability to afford proportionately more space as they grow;  or
  3. They divide, with a small part of the organisations being situated in the city centre and the remainder based in the suburbs or even in a totally different town or city – with all the difficulties in communication and coordination that can create. 

This trend is bad for the economy, local communities and the environment. Residents lose access to goods and services, employees are forced to travel further for work, and the growth of small business is hampered.  

Why should someone working for a small organisation – either a charity, not-for-profit or small business have sub-standard, cramped and grotty offices in remote locations?  There needs to be changes in the way we operate.

About 15 years ago, Ethical Property and other pioneering organisations saw the opportunity in Old Street, for convenient low cost office space in a not too out of the way location. In time, a vibrant community was built; indeed the area was regenerated so successfully that the big money developers are now moving in. The result is that those who are the catalyst for regeneration are in danger of being priced out of the very area they were instrumental in reforming. 

Forward thinking local authorities, such as Hackney and Islington have identified this risk and have begun to take measures to reverse the decline. Using planning policy they are beginning to insist that large scale commercial developments include the provision of affordable workspace. At the same time they have developed a list of registered affordable workspace providers who they can partner up with developers to ensure there is an end user who can develop and manage the affordable space. They have decided to develop relationships with affordable workspace providers. 

I would like to see more authorities adopt this approach, just as the provision of social housing is required in residential developments we believe that affordable workspace should be provided in commercial developments. Whilst this is not a panacea it is certainly a move in the right direction and is the first steps in reversing the growing inequality in access to good quality workspace.


Header image: Oxford

Photo credit: David