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By Tom Bill
LONDON, Jan 22 (Reuters) - The British government will makeit easier for developers to convert offices into apartments, thelatest in a string of initiatives to kick-start economic growththrough housing.
Planning minister Nick Boles is due to announce the changesto the planning system this week to help to meet the country'shuge demand for housing and revamp rundown areas where officeschemes are not viable, a government source told Reuters.
"We are currently looking to make it easier to convert emptyand under-used commercial space into residential use. This willprovide new homes, help regenerate urban areas and boost localtown centres," a spokeswoman for the Department for Communitiesand Local Government said. "We will announce more detailsshortly."
Sterling hovered near a 10-month low against the euro onMonday and looked vulnerable to further losses as concerns abouta so-called triple-dip recession in the UK grew ahead offourth-quarter growth data on Friday.
Other housing initiatives in the government's battle forgrowth include Funding for Lending and NewBuy, both of which areunlikely to make a significant dent in the target of 240,000 newhomes every year by 2016 to meet population needs, Peel Huntanalyst Robin Hardy said.
"If the planning barriers to conversion are effectivelyremoved, this could have a significant impact," Hardy said ofthe new scheme. "The whole country is littered with masses ofunder-occupied low-value office buildings that would makefabulous residential (property)."
Residential values are about double office values acrossmuch of the UK, making housing schemes more viable, said MatOakley, director of commercial research at real estateconsultant Savills.
"You have to ask whether some office sites have any value atall if they are empty and unlettable," he said. "The bigquestion is whether developers can borrow the money to do it.It's still speculative development."
The price difference can reach four to five times for thebest London sites. This has led to a flurry of deals bydevelopers, including British Land and Land Securities, to meet the insatiable demand from wealthy overseasbuyers looking to park their cash.
The predominance of such schemes has led to a backlash fromlocal residents priced out of the market and the city's bestapartments are often used only a handful of times a year bybuyers from Russia, Eastern Europe and the Middle East.
