Can you use commercial property as residential?

With many commercial properties appearing on the market each day and residential property prices rising, people are looking for non-conventional solutions to create more affordable properties. Historically, using commercial property as residential had many restrictions attached to it. In recent years, however, it has become more feasible.

As a result of the 2015 General Permitted Development Order (GPDO) amendment, it is now possible to convert a commercial property into a home. Planning permission also isn't required if the conversion is covered by permitted development rights, or if the property will be converted within the same class.

The government categorises commercial properties in different "classes", so whether you'll need planning permission will depend on this. Ensure that you find out which class your property is in before undertaking any conversion work. Failing to do this may mean that you encounter problems in future regarding planning permission. The rules can be complicated, so often it's best to consult the guidance of a professional. If you'd like to seek assistance regarding commercial property, our team are always on hand to discuss converting commercial property into residential property, so feel free to get in touch.

Benefits of converting commercial property

There are many benefits to converting a commercial property. For instance, commercial properties are often close to amenities and transport links. Since many retailers have turned to online sales, retail properties are often available at a lower price and give investors good value for money.

Commercial properties are great starting points for those looking to create houses of multiple occupancies (HMOs). These are great for investors as they generate more revenue than single-let properties.

In what instances are you unable to convert a commercial property?

Some circumstances will prevent a conversion. These include if the property is located in a national park or conservation area, an area of natural beauty or scientific interest. Additionally, if the building is in an area that is considered a safety hazard or where military explosives are handled or stored, then a conversion will not be possible.

Converting listed buildings

Although converting a listed building is possible with permission, it can be quite a difficult task. It will usually require the owner to complete the full planning permission process and may even require architectural drawings or the planned conversion to be provided. As with all listed buildings, making changes may require the use of certain materials and for the work to adhere to a standard in which the preservation of the building's history is the main priority.

Converting a commercial property can come with substantial costs, so it's important to familiarise yourself with what to expect.

Cost considerations

The costs of converting a commercial building can quickly add up, so you must include these in your budget. This may include planning permission fees, solicitors fees, surveying, and construction fees covering things such as residential drainage, electrics and plumbing. Stamp duty will also need to be paid on the property.

Safety and liveability considerations

Before a commercial property is deemed fit for residential use, several safety standards will need to be met. These include safely removing any hazardous materials and ensuring the property adheres to residential plumbing, electrical and gas regulations.

If you are planning to let the property, it's also important to consider whether the property would be desirable to tenants. For example, if the property lacks parking facilities, whether noise pollution is a problem and its distance from the nearest school.

Funding the property

Mortgages surrounding residential properties can be a little more complicated. Although you may still be able to obtain a mortgage, you may need to take out insurance to cover the building while it is being renovated under the mortgage terms. You may also apply for a self-build mortgage. This can be beneficial for conversion but may mean you need to pay out the conversion costs upfront before being reimbursed. This will, however, depend on the terms that you agree with your broker.

Common issues with commercial property conversion

If you fail to do your research before taking on a commercial conversion, you may find yourself in unexpected situations. Commercial properties can come with structural issues that will need to be addressed before they are deemed liveable, so it's always best to identify these before committing to buy the property.

Ensure that you consider all costs that may arise, including any structural repairs and that you have adequate funding in place. Conversions can also sometimes take much longer than expected, so ensure you consider this in your planning. You may also need to work with specialist commercial property surveyors and fund several commercial building surveys, so it's important to consider this in your budget.

NFC Homes specialise in converting commercial property into residential property, with more than 15 years of experience. Contact us today for a free evaluation of your property.

Can you legally live in a commercial property?

Living in a commercial property is something that probably hasn't crossed the minds of the majority of people. However, with residential rentals and sales out of reach for a lot of people - particularly in cities like London - it may seem like an attractive, more affordable option.

Many commercial premises are appealing because they often contain wide, open spaces, which can be moulded into almost any shape or form. Many of them also contain an abundance of natural light and quirky design features.

As a result of the pandemic, there are now many commercial and office spaces just sitting empty - this seems like a waste of space to some people that are finding the cost of living prohibitive. So, you may be thinking... why can't I just move in?

So, can you really live in a disused commercial space?

Sadly, you can't just decide to move into a property that has commercial status. This is primarily because the building insurance of a commercial premises - which is a necessity - will not cover people living in it. If you move into a commercial property with commercial insurance, you will be breaking the law and will be subject to punishment if you are found out.

What if I want to live in a commercial property?

If you've seen a vacant space you like, and you want to live in it, the good news is that it may be possible. However, you will have to apply to change the use of the building from commercial to residential.

Consider what type of building you're applying for if you decide to do this; if you're applying to change a serviced office within a large block, you're probably unlikely to convince the insurance company to change its status. However, if it's a previously-used small retail space within a residential area, you might stand more of a chance.

How do I convert a commercial space into a residential space?

You will likely need planning permission from the local council in order to convert your space into suitable dwellings. The council's local planning authority (LPA) will then make a decision over whether to refuse or grant your application.

You may also benefit from a land valuation to get a true idea of the value of any surrounding commercial land.

How much does it cost to apply to change the use?

Fees for applying to change the use of a property vary, but can cost more than £500 in some areas, such as London. Your LPA is more likely to grant you permission if there are similar successful applications in the area. This isn't the only cost, however; you'll likely need to pay for an architect to draw up proposals, and then you'll have the conversion cost if it is approved.

What is the likelihood of getting the application approved?

You can check previous records on your council's website, and can even search for others within that road. If you find a commercial to residential application that has been successful in your road or area, the closer you stick to this application, the greater your chances will be.

Can I use Permitted Development Rights to move into a commercial property?

In some cases, you will not need planning permission to convert a commercial property into a home. There are a few types of commercial buildings that have Permitted Development Rights (PDR) status, which means they can be converted without permission.

The types of properties that could have a PDR in place including light industrial premises, certain office buildings and retail premises. In many cases, the total floor space should not exceed one hundred and fifty square metres.

Despite not needing planning permission, there may still be certain guidelines that you'll have to stick to when converting a PDR building. You may need to limit windows within your design, and there may be considerations with the privacy of neighbouring buildings.

If you are in doubt, it is always best to speak to your local council and planning authority. They often provide services that advise you of what types of plans and alterations are likely to be approved, saving you time and money.

Is living in a commercial property a good option?

This is an entirely subjective question, and the answer depends on the specific building and the end goal you have in mind. In conclusion, it is important to realise that living in a commercial property is unlikely to be as cheap as it first appears - the conversion could even end up being more expensive.

However, converting a more unusual building into a dwelling can be a great option for those that are looking for a more alternative lifestyle and desire a more unique place to live. If you are thinking of converting a commercial space - do your homework; speak to as many people as you can and make an informed decision.

In short, yes you can live in a commercial property... but only if you convert its status to residential first. If you'd like to discuss how we can help you convert your commercial property into residential property, then get in touch.