How to convert commercial property to residential use

According to the NAEA, planning regulations have created restrictions that make the purchase of properties with the potential for conversion too risky for developers.

NAEA Chief Executive Peter Bolton King said: "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 versus 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 12 months. If the owner can prove there is no market for the building commercially, they may consider a change of use.

Consultation on the relaxation of commercial/residential planning law closes on 30 June.

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