When considering ‘commercial to residential conversions’, in most instances the proposals involve converting retail or commercial property into residential homes, usually flats or apartments.
This has become an attractive option for some landlords due to high streets across the country suffering from reduced customer footfall in recent years.
As a result of many shops and restaurants closing their doors for good, commercial landlords have been faced with the challenge of finding 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.
Here, Carl Jones, a Director with Mander Hadley and Head of our Commercial Department, outlines how the new legislation works and the potential opportunities for property developers who wish to take advantage of this initiative:
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?
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.
Depending on where the property is situated, commercial property is usually more expensive than residential property. Take into account 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?
There can be many pitfalls in purchasing property, so before making a final decision the property will need to be surveyed. Engaging a specialist legal adviser early in the process can also ensure that costly mistakes are avoided. They will be able to read through the property deeds to find out whether there are any restrictions to changes in the property. In some instances, it may not be possible to change the use class, whilst for some building the restrictions may only be temporary.
If you would like further advice on commercial property conversions, get in touch with our expert commercial team.
Director - Head of Commercial Department
I qualified as a Solicitor having completed my training with Mander Hadley in 1992 and am a member of the Law Society Property Section and The Warwickshire Law Society.
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