When discussing ‘commercial to residential conversions’, it usually means converting retail or commercial property into residential homes, usually flats or apartments.
This has become an option for more landlords after the high street suffered from the growth of online shopping and more people working from home during the pandemic.
This had a considerable impact on many town and city centres, with offices servicing fewer businesses and many shops and restaurants closing as a result, leaving landlords with a challenge to find new tenants.
To help, the Government has introduced legislation that allows for commercial to residential conversions, as part of a wider campaign to rebuild and revitalise town and city centres.
High demand areas
The new legislation is intended to help with the creation of new homes in high-demand areas, while also utilising vacant buildings across the nation’s high streets.
The new initiative allows for a simpler ‘prior approval’ process, instead of a full planning application but will remain subject to high standards, ensuring that new residential development provides adequate natural light and meets space standards.
Commercial to residential property conversions could help landlords and investors to improve their returns from otherwise vacant properties, but there are a number of issues that you need to consider.
What will you need?
- Planning permission
Any proposed work converting to residential must comply with building regulations. It can be a time-consuming process and investors will be required to contact a local planning authority (LPA) to ensure regulations are met.
- Adequate funding
Depending on where the property is situated, commercial property is usually more expensive than residential property.
Consider the size and condition of the property. A building in poor condition will obviously cost more to convert, but if vacant for a long time can be purchased for a decent price.
Also consider transport options, are the premises easily accessible?
- Professional help
There can be many pitfalls in purchasing property, so before making a final decision get the property surveyed and make sure you engage a top legal adviser who can read through the property deeds to find out whether there are any restrictions to changes in the property.
In some instances, you may be unable to change the use class, and in other cases, it may only be temporary.
For help and advice on matters relating to the commercial and residential property sector, contact Gunduz Misiri on gunduz.misiri@mackrell.com or at 020 7240 0521.
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