Walk down any shopping street outside the central London boroughs and you will see that numerous upper floors are empty or used for casual storage. It is estimated by the Living Over the Shop Project in York that at least half a million and possibly up to one million new homes could be created in these spaces. The beauty is that this accommodation is found not just in the big cities but in the numerous country towns, helping to provide the spread in new housing that the Government wants. It also suits the smaller one or two person households that make up the bulk of the predicted extra 4 million homes needed by 2016 and is located by its very nature in the centre of urban areas reducing reliance on road transport. Bringing people back into towns and cities not only helps sustain shops and schools and other services, but makes streets safer and makes use of existing infrastructure.

A number of schemes have been tried to encourage landlords to convert their upper floors, but take up has been disappointingly low. The large institutional owners see the rates of return as too low to outweigh the perceived management problems and there is still a residual, though unfounded, concern about sitting tenants; persuading small landlords or independent shopkeepers is an enormous drain on local authority resources because just one 2 or 3 bedroom scheme can take years to deliver. It can simply be very difficult to find and persuade absentee landlords and leaseholders

These problems can be tackled in a number of ways:

o A concerted Government campaign is needed to counter many of the unfounded prejudices of owners and persuade them to sign up; this needs to be backed up by a properly resourced central advice service for owners, housing associations and local authorities to help them put schemes together.

o The LOTS mechanism developed by Ann Petherick at the Living Over the Shop Project addresses many of the concerns of landlords: an intermediary body, such as a university or housing association, takes on the upper floors on a, say 25 year, commercial lease and lets to residential occupiers on assured short hold tenancies - guaranteeing the landlord income and taking on the management responsibilities.

o Most importantly, it requires cash. Quite simply in most cases owners and developers will see it as an attractive investment only if grants are available towards the capital cost of conversion and refurbishment. At the moment these can be found for some schemes from a number of disparate sources, but assembling these is time consuming and complicated and therefore a strong disincentive. Under its urban regeneration drive the Department for the Environment, Transport and the Regions needs to provide an all encompassing and straightforward grant programme for LOTS conversions.