The short answer is, yes you can. Just a few of the advantages of converting from commercial to residential are:
- Prices on the commercial property market are currently lower than residential properties.
- Commercial properties are often well positioned in population centres with good transport links.
- Scope to create a unique and distinctive living environment.
- Converting to a HMO means you can rent to multiple tenants.
However not all commercial buildings are eligible.
These include buildings within conservation areas or national parks, or within designated areas of natural beauty or scientific interest. Listed buildings. Or, for fairly obvious reasons, buildings within safety hazard areas or military explosive zones.
That said, some of the examples listed may actually be possible conversion projects, but will need full planning permission, the production of some architectural drawings, and perhaps the requirement that any necessary work is completed to a standard that limits your plans. Also, some local authorities may have more stringent development rules that make your plans unviable.
Determine the Use Class of the building.
All UK buildings fall into various categories or Use Classes. The current Use Classes were last updated on 1 September 2020. A significant reform of the Use Classes Order came into force on 21st April 2021. The use classes below are effective up to 31 August 2020 and effective from 21st April 2021.
Class E includes commercial business and services. Class F.1 includes learning and non-residential institutions. Class F.2 is local community & learning. Class B2 is general industrial. Class B8 is storage or distribution. Class C1 is hotels. Class C2 is residential institutions. Class C2A is secure residential institutions. Class C3 is dwellinghouses. Class C4 is houses in multiple occupation. Then there’s ‘Sui Generis’ which denotes that a building is in a class of its own.
Any proposed conversion of a commercial building to a residential property may require you to apply to the Local Planning Authority to change the use class.
Work out if you need planning permission.
When you apply to change the use class, you can also find out whether you need planning permission to carry out any development work, as it depends on the building’s use class. Some conversions not needing permission include shops, retail warehouses, showrooms, light industrial premises, banks, professional services and hairdressers, so long as they don’t exceed 150 square metres.
On the other hand you may need planning permission If you plan to alter or extend the building’s exterior, the windows or move any doorways.
Then there are the costs.
The price you pay for individual commercial premises will depend on its location, state of repair as well as its potential for conversion – including whether it already has the relevant planning permissions. Other buying costs are much the same for a commercial property as a residential property. Stamp duty begins at £150,000 rather than £125,000.
You may also need to take on additional building work, such as sound proofing the property, or providing it with thermal insulation to make it suitable to live in. Also budget for any changes to drainage, water and electrical systems that might not currently be geared up for residential use.
Arranging the finances.
You have a few options for funding the conversion. Often a developer will choose a mix of commercial and development finance options, incorporated into one convenient arrangement. Other routes are through a self-build mortgage or a bridging loan. This is something you’ll need to discuss with your lender.
Thereafter you’ll go through the same process of exchange of contracts and completion as you would when buying a conventional residential property. Bear in mind that you’ll need a solicitor who specialises in commercial property to carry out the conveyancing.
If you are looking to acquire a commercial property, Graham and the team are more than happy to support. Please do not hesitate to contact our Commercial team at Louis Taylor on 01782 260 222 or email email@example.com.