Adding value as a property developer: Converting commercial to residential
Read the guide to Converting Commercial to Residential here.
The landscape of the housing market and development in the UK is both multifaceted and evolving, compelling developers to tackle various legal and practical obstacles. This series, brought to you by Arc & Co. and Lewis Denley Solicitors, highlights four vital areas that every developer should focus on to make certain their projects are legally compliant and commercially successful.
There has been a general decline in the demand for commercial retail units, which are now available at more affordable prices.
While the commercial property market has seen some recovery due to an increase in workers returning to offices, it is still not at pre-pandemic levels. This shift, combined with the rising demand for housing and the relaxation of planning rules, has made converting commercial properties into residential units an increasingly attractive prospect.
Under Permitted Development Rights (and specifically Class MA), developers can convert certain commercial premises to residential use without the need for a a full planning application. This can significantly reduce costs and timeframes for developers, making it a popular choice in the property market.
Permitted Developments (PD) can be attractive opportunities due to reduced below-ground risk and shorter build periods, providing developers quicker returns on investment.
With several landlords looking to dispose of commercial assets due to the cost of the works required to upgrade and achieve EPC targets by 2030 and strong demand from PD developers, being able to demonstrate the ability to secure funding and complete within a certain timescale can provide a competitive edge in negotiations.
These commercial to residential opportunities can present themselves in various forms including purchase of the existing commercial stock, with planning, or PD and subject to planning consent.
Read the guide to Converting Commercial to Residential here.