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  • Writer's pictureNFC Homes

How to convert commercial property into residential

There were once many restrictions on the process of converting a commercial property into residential premises. Fortunately, the situation changed in the middle of the last decade.

Today, converting a commercial property into a residential development is a simple process. As a result, increasing numbers of developers are purchasing and altering commercial properties for residential means, thanks in part to their larger floor space which means they can even be used for multi-occupancy homes. That being said, the process can still be a long, tedious and expensive one if you don't know what you're doing.

Read on to find out how to convert a commercial property into residential.

What to consider when converting commercial property into residential

Before you can begin the process of converting your commercial property into residential property, there are several things that you must bear in mind. This includes:

Check the building's classification

UK building regulations categorise every building in the country in a specific use class. Class A encompasses buildings that provide commercial services.

Class B usually includes warehouses and commercial offices. Residential buildings are considered part of Class C.

The final class is Class D, which includes miscellaneous buildings such as cinemas and leisure buildings.

Consequently, you must know the classification of your intended building. Each class has its own conversion rules which may present some challenges. For instance, commercial properties have flexible conversion rules for developers, but the situation is not the same with buyers.

The cost of conversion

There will be specific costs incurred during the conversion process. Even when you're not starting the process from scratch, you will end up spending a lot of money if you don't understand the process well.

This might be the case for buildings that need extensive repairs and structural changes. The entire cost may eat into your profits.

Understand planning permission rules

Obtaining planning permission is not a standard requirement, but you should be prepared for it so ensure you enquire with the local authority whether you need any consent before beginning the conversion.

Permission may be compulsory for projects that involve knocking down walls. Consequently, any costs associated with obtaining permission should be included in your budgeting process. For more information on planning permission, you can view our recent article on the subject here.

The conversion process

The conversion process is determined by the GPDO directive of 2015. This directive removed some obstacles to give residential developers more flexibility.

Here are some of the steps involved:

Create a budget

Before you start looking for commercial buildings to convert, you will need to work out your budget. Knowing how much money you are willing to spend can save you a lot of trouble along the way.

You will save a lot on the conversion project if you can determine unexpected costs before the project starts. It is generally recommended that you should budget for more than is required. The total cost encompasses building purchase, land valuation costs, and permission approval expenses.

Find the ideal property

It's now time to look for the right property. Commercial properties in a particular location or with specific structural or architectural features may be high on your list and could potentially add greater character to the residence in future, which could increase its resale value. In the short term, they may also provide good rental returns. Arrange to speak to a professional real estate expert who can help you find the right property to convert.

Check the building's classification

Once you have found a property, you will need to confirm the building's class type (as described above) before you can begin with the conversion as some restrictions may apply.

Confirm any exceptions

While most commercial buildings can be converted into residential areas, there are some exceptions. Buildings within national parks and designated government structures cannot be converted to residential properties.

The same applies to any building that the government deems to be a security hazard. For example, if a building was initially used for military experiments, it cannot be converted into a residential area.

Therefore, you should check if there are any exceptions for the building you want to convert into a residential property. At the same time, you should keep an eye on the required standards.

Some design plans may prohibit specific structural changes. This prohibition technically stops any conversion process.

Seek the necessary permission

As mentioned above, you may not need planning approval for some conversions, but the local council must approve your upcoming projects. If the building is used as a bank, showroom, shop, or retail warehouse, you will need permission from the local council.

Buildings that cover more than one hundred and fifty square metres have extreme conversion regulations. You may also need conversion permission if you want to change the doorways or stairways.

Get funding

There is a range of financing options that you can use to fund your conversion project. You may be eligible for a bank loan or a mortgage from a building society to help convert a commercial building into a residential one.


Converting a commercial property into residential property is a smart move. If the commercial property is not functional or profitable in its current state, then it may be better utilised as a place of residence. However, you must understand the conversion process and pay due diligence if you want to do it correctly and save time and money. If you own a commercial property and are looking to either convert it or sell it on, contact us today for a free no-obligation quote.


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