Top 5 considerations: Commercial to residential conversion

Top 5 considerations: Commercial to residential conversion

We take a look at the most important factors you should consider before converting commercial property to residential

Due to the economic downturn in recent years, there is now an abundance commercial property stood vacant. Some buyers who are looking for a residential property are taking advantage of this situation, by buying commercial property and then converting it into a home. The main benefit of this approach is that buyers are able to secure a bargain, as prices can be significantly lower than residential new-builds due to the saturated commercial market. However, before you rush out and start bidding on a nearby warehouse; there are a few factors that you should be aware of to help you decide whether it is the right route for you.

Additional costs

Whilst making alterations to an existing building may seem like an uncomplicated and thus relatively cheap option, there are several hidden costs that you may not have considered. Perhaps the largest of these is the cost of labour, with skilled workers often required to carry out the work in order to comply with residential standards. It may also be that the property is subject to additional building requirements, such as Part L regulations, relating to the conservation of fuel and power. Once you add these additional costs to the project, it may be that the new build is actually the cheaper option.

Access points

A common problem with many commercial properties is that they are situated in town centres. This could mean that there are complications when it comes to traffic routes and parking. You’d be very annoyed at having created the perfect home, only to discover that you had to queue in traffic for 15 minutes to access your property, due to a recently implemented one way system. Or that parking restrictions mean that the closest you can park to your home in a 15 minute walk away. These details should always be checked with the local council.

You should also bear in mind that some properties will have joint entranceways. So, it may be that the hallway is also used to access an existing flat that is situated above your intended home. This can be checked with the current owner of the property and is certainly worth considering if you intend to make any internal chances to the building.

External work

Whilst new legislation recently passed by the Government makes it easier to convert commercial buildings into homes; it is important to remember that this only applies to the inside of the property. If you are renovating or extending a shop front then you will normally be required to apply for regular planning permission. In addition, if you are looking to convert a commercial property in a market town, it may be that the facia of the building must be kept to look the same as those in the surrounding area, due to a covenant. This could impact on the cost of the project if specific materials are required to undertake the work.

Surrounding area

There can be many benefits to being situated in an area that is traditionally commercial, such as being close to the shops and travel networks. However, there are also some negatives that must be considered, such as whether there is a school close by, or the noise that you may be subjected to if the property is situated close to pubs, clubs, bars or takeaway shops. If there are already some residential properties nearby, you may even want to knock on a few doors and find out how the residents find living in the area.

The waiting game

If you have weighed all of the above factors up and still feel that converting a commercial property is the right move for you, there is one final consideration; available time. Many local authorities have in place a policy whereby they will only consider changing the use of a property from commercial to residential, if the owner can prove that there is not a market for it in its current state. In order to satisfy the local authorities’ requirements, the property will have to be on the market for at least 6 months, with some demanding as long as 12 months. So, if you have your eye on a little corner shop that you’d like to convert, it could be that you have a long wait before the owner can even consider your proposal. Not ideal if you are in a rush for your new home!


A guest post by Eddisons – experts in commercial property management.