There is 11.7m sq ft of obsolete space in the regions, of which 7.4m could be suitable for residential conversion under the government’s new planning rules, according to research by Lambert Smith Hampton.

The analysis of 32 regional markets found the 7.4m sq ft of obsolete office space across the country, if converted, could be turned into 11,500 dwellings.

The government is pushing an initiative to encourage developers to consider converting office buildings into homes and has relaxed planning rules to make it easier to do so. It believes that easing the rules will help to provide housing and could remove the blight of ageing, empty office buildings from many town centres across Britain.

Developers would not have to seek consent to change the use of a building from office to residential. However, any internal conversion would still have to meet building control regulations and, if external alterations were needed, such as recladding, a fresh planning application would have to be submitted.

Tony Fisher, Lambert Smith Hampton’s national head of office agency, said that the country was littered with redundant office space because tenants’ workspace requirements had changed over the years. “They now need flexible, open-plan space and — crucially — less of it. In the past 20 years, the amount of allocated space per person in an average UK office has halved.

“Office occupier requirements will continue in this vein, meaning any stock that does not meet modern workplace trends is unlikely ever to be let again. While not every obsolete building can be converted [to residential], a fair proportion could be.”

Fisher added the incentive to convert was greatest in London, where the gap between office and residential values was highest. He added: “The gains to be made from conversion are substantial across the UK. Average capital values for UK residential space are approximately £155 per sq ft, compared with average secondary and tertiary office values, which range from £30 to £80 per sq ft.”

Savills’ prime London index has shown “modest price growth” of 17.6% since the end of 2010.

London’s most expensive homes have climbed for an unprecedented 10 consecutive quarters. Savills says the market is in no danger of overheating.

The Hellenic Republic Asset Development Fund has sold its consul’s Holland Park, west London, residence for £23m.

The fund, which runs Greece’s state privatisation programme, put the Grade II-listed 10,000 sq ft property up for sale in September as part of a €230bn (£195bn) bailout agreed with the European Union, the International Monetary Fund and the European Central Bank. The buyer of the Holland Park property is not reported.

The latest merger and acquisition rumour to hit the property market, is a £1.9bn (AUD$2.8bn) tie-up between Cushman & Wakefield and Savills.

Rumours of a potential merger or takeover first surfaced at MIPIM earlier this month but have now beenpicked up in the Australian press.

A merger of the two agents would create a firm to rival property giants CBRE and Jones Lang LaSalle.

Cushman & Wakefield said it "does not comment on market rumour and speculation". Savills declined to comment.

The Australian press has also recently highlighted that a merger between Cushman and DTZ would be a good strategic move for the latter, with owner UGL this week raising the prospect of a DTZ demerger.