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Converting Commercial Property to Residential in the UK

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Imagine stumbling upon an old, abandoned factory in the heart of your city. Its windows are boarded up, its walls are crumbling, and its once-bustling interior now lies silent.

But what if I told you that this derelict building could be transformed into a thriving community of modern, stylish apartments? In the UK, converting commercial properties to residential use is becoming increasingly popular, thanks to changes in permitted development rights and a growing demand for unique, urban living spaces. In this article, we’ll explore the process of turning that old factory, office block, or shop into a desirable residential property, the complex world of planning permissions, building regulations, and budgeting. 

Table of Contents

Permitted Development Rights

In recent years, the UK government has introduced various permitted development rights (PDRs) to facilitate the conversion of certain types of commercial properties to residential use without the need for full planning permission. These rights, known as “Change of Use” PDRs, allow for faster and more streamlined conversions.

Some key PDRs to be aware of include:

  • Office to Residential (Class O): Allows the conversion of office space (B1a) to residential use (C3).
  • Retail to Residential (Class M): Permits the change of use from certain retail uses (A1, A2, A3, A5) to residential.
  • Storage to Residential (Class P): Enables the conversion of storage and distribution properties (B8) to residential.

 

However, it’s important to note that these PDRs come with certain limitations and conditions. For example, the property may need to meet specific size thresholds, and the conversion must comply with national space standards and building regulations.

Minimum Residential Space Standards and Mortgageability

When converting a commercial property to a residential property, it is important to ensure that the resulting living spaces meet minimum size and quality standards. The government has published the Nationally Described Space Standard (NDSS) in the UK, which sets out minimum requirements for the Gross Internal Area (GIA) of new dwellings.

 

Number of BedroomsNumber of Bed SpacesMinimum GIA (m²)
Studio137
1250
2361
3474
4586

Adhering to these space standards is important for the comfort and well-being of future occupants and for the property’s mortgageability. Many lenders will only provide mortgages for residential properties that meet minimum size and quality criteria.

I once worked with a developer who was converting a former shop into a one-bedroom flat. Initially, they planned to create a compact studio apartment to maximise the return on investment. However, after discussing the importance of meeting the NDSS and ensuring mortgageability, they decided to reconfigure the layout to create a more spacious one-bedroom unit that exceeded the minimum space requirements. This decision ultimately made the property more attractive to both buyers and lenders.

Converting Commercial Property to Residential in the UK
It's essential to develop a comprehensive budget and financial plan before embarking on a conversion project.

Budgeting for a Commercial To Residential Conversion

Converting a commercial property into a residential can be a significant financial undertaking. Some of the costs to consider include:

  1. Planning and application fees
  2. Building works and renovations
  3. Professional fees (architects, surveyors, etc.)
  4. Loss of rental income during the conversion period
  5. Financing costs (e.g., bridging loans)

Developing a comprehensive budget and financial plan before embarking on a conversion project is essential. This should include a realistic assessment of the likely end value of the residential property, taking into account local market conditions and any unique features of the converted space.

Always put together a healthy contingency of around 20% to plan for unexpected costs.

If you have bitten off more than you can chew and need to sell commercial property quickly, we can help!

Successful Conversion Case Study

A great example of a successful commercial-to-residential conversion is the transformation of a former Victorian warehouse in London’s East End. The property, which had been used for light industrial purposes, was purchased by a developer with a vision to create a set of unique, loft-style apartments.

The developer worked closely with an architect to develop a design that maximised the building’s industrial character while meeting all the necessary residential standards. The large, open spaces were divided into generously sized apartments, each with mezzanine levels, exposed brickwork, and high ceilings.

Despite the challenges of working with an old building, the developer secured planning permission and completed the conversion within budget. The resulting apartments were highly sought after, with all units selling off-plan before the development was even completed.

This case study demonstrates that with careful planning, creative design, and a clear understanding of the market, converting a commercial property to residential use can be a highly successful venture.

Struggling with Your Commercial to Residential Conversion?

If you’ve taken on a commercial-to-residential conversion project and are feeling overwhelmed by the complexity and scale of the task at hand, don’t worry – you’re not alone. At Property Saviour, we’ve seen many property owners and investors who have bitten off more than they can chew, and we’re here to help.

We understand that converting a commercial property into a residential space is no small feat. There are countless building regulations to navigate, planning permission to secure, and design challenges to overcome. It’s easy to feel like you’re drowning in a sea of paperwork and construction woes, watching your budget and timeline spiral out of control.

That’s where we come in. At Property Saviour, we specialise in helping property owners and investors navigate the complex world of commercial-to-residential conversions. Our team of expert architects, planners, and project managers has years of experience transforming even the most challenging properties into stunning, marketable homes.

We’ve seen it all – from the investor who bought a crumbling Victorian factory without realising the extent of the structural damage to the family who inherited a defunct corner shop and had no idea how to turn it into a livable space. No matter how big or small your project, we have the knowledge, skills, and resources to help you turn it around.

When you work with Property Saviour, you’re not just getting a team of professionals – you’re getting a partner who is invested in your success. We’ll work with you every step of the way, from untangling the planning process to managing the construction and fitting out your converted property to the highest standards.

We know that time is money in the world of property development, and we’re committed to helping you get your converted property on the market as quickly and efficiently as possible. Our network of trusted estate agents and buyers means that we can help you find the right buyer or tenant for your unique property, ensuring that you get the best possible return on your investment.

So, if you’re feeling stuck, stressed, or simply unsure of how to move forward with your commercial-to-residential conversion, give us a call at Property Saviour. We’ll listen to your challenges, assess your project, and develop a bespoke plan to help you overcome any obstacles and achieve your goals.

With Property Saviour by your side, you can transform that daunting project into a success story – a stunning, one-of-a-kind property that reflects your vision and exceeds your expectations. Don’t let your commercial conversion project become a burden – let us help you unlock its full potential and create a space that you can be truly proud of.

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