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Commercial Conversion

publication date: Sep 13, 2011
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Commercial Conversion

Top Tips for Converting Commercial to Residential Property

A huge potential opportunity may be possible for property investors and renovators following the Government's decision to facilitate the conversion of property from commercial to residential in an aim to boost housing supply levels.

However, warns Kate Faulkner from independent property advice site Designs on Property undertaking this kind of project needs to be done following careful research and planning.

Expert advice from Peter Bolton King, Chief Executive of the NAEA says, "Theoretically, the Government's decision to bring in this crucial change to planning regulation will provide a much cheaper alternative to new build properties. 

"It will also go some way to solving the problems that commercial property owners face - particularly those being hit with high business rates for buildings that no-one occupies. But such renovations are not simple undertakings.  We advise that a thorough evaluation of the work involved is carried out beforehand to avoid additional cost burdens."

"For example, those looking for potential sites for conversion will need to consider the location of the property, particularly since the amenities you might find in a residential area may well be lacking.  And they must also factor in the additional costs involved with existing building covenants."

For those looking to convert commercial property, the NAEA recommends the following:-

  • Weigh up cost of conversion vs new build
    Although fitting out an existing property might seem like the cheaper option, commercial space often requires more skilled labour to comply with standards for residential use, therefore adding to overall cost of a project. Additional building requirements are often applicable to dwellings such as Part L regulations that ensure compliance to conservation of fuel and power so it is always worth checking in advance.
  • Assess points of access
    Given that a lot of commercial property is situated within town centres where zoning restrictions can affect parking and access routes, it is important to look at this before purchasing the property. You don't want to create your dream home, only to find you have to walk several miles to get to your car, or worse still, pay hefty parking charges each year. It is therefore worth contacting your local council to clarify rights of way and parking arrangements.

    Similarly, as some premises might have shared access to additional space upstairs (such as an existing flat), it is worth speaking with the owners to find out where you stand, as this will no doubt impact on any internal changes you plan on making.
  • Additional external works might not be exempt
    It must be remembered that the legislation in question applies to "change of use" only and so any extensions or renovation of shop fronts are likely to be subject to regular planning permission. Additionally, changes to high street premises, especially in market towns might be bound by covenants that require the facia to remain in-keeping with the surrounding area - this could also add to the cost if specific materials are required.
  • Take a good look at the property's surroundings
    Look at the whole area to get a feeling for it and be sure you are comfortable living somewhere which won't be purely residential. While you might be closer to the shops, you could in fact be further away from a school. Noisy neighbours might also need to be considered if your property is located near to bars, nightclubs and takeaways.
  • Be prepared to wait
    Some local authorities adopt a blanket policy when considering change of use planning applications whereby the property must be placed on the market from anywhere between six and twelve months. If the owner can prove there is no market for the building commercially, they may consider a change of use.

If you are thinking of buying and converting a commercial property, then speak to us first for independent expert advice and help to make sure you buy the right property and carry out the correct due diligence.


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