As we are all aware the country’s usage of both commercial and residential property has changed over recent years, with more people working from home or on a hybrid basis, leading to a rise in unused commercial and office space. Meanwhile, the rise of online shopping has also taken its toll on town and city centres, with a growing number of empty shops and it has been estimated that 300,000 homes could be created from empty premises above commercial spaces.
Housing demand in the UK continues to grow and an ongoing gap between supply and demand for residential property has led to an increase in the number of change of use applications of commercial premises.
These applications are often for the conversion of empty commercial premises into residential use, and this can be appealing to property investors as the homes created have the potential to be rented out to tenants.
Private tenants are also more likely to want to live in a town or city centre, where amenities, infrastructure and transport already exist, whilst being close to a place of work. This means that landlords can find even greater demand for residential property in converted commercial spaces.
Recent research has revealed that in the last four years there has been a 63% rise in commercial to residential property change of use applications in England and instances where these conversion applications were approved also increased by 60% over the same period – down to a combination of a higher level of applications, as well as the easing of some Planning regulations.
Conversions can be viewed as a more sustainable property investment, as the building structure and surrounding amenities are already present, meaning less outlay. The growth in tenant demand for city and town centre living, can potentially provide residential property landlords with a reliable, long-term income.
It is apparent that the property market is constantly evolving and, as demand for residential property continues to soar, it has increased the attractiveness of converting unused commercial spaces above retail units into domestic use.
Other advantages are that mixed-use retail and residential development help to keep town centres alive, enabling nearby businesses which are still viable – such as gyms, theatres, cinemas, shops, hair salons, barbers, public houses, restaurants and cafes – to flourish and thrive with the consequential increase in local residents.
At Durrants Building Consultancy we have noticed the increase in enquiries from Clients asking for advice regarding the conversion of retail and commercial properties in the town centres of Diss, Harleston and Southwold into residential use, particularly at First Floor level and above.
We have already successfully achieved Planning permission for two residential conversions above retail remises in Diss and a residential conversion of an entire retail unit in Southwold and are currently involved in looking at another four separate premises in Diss and Harleston with a view to achieving the same result.
We are of the view that this is a burgeoning market and there is considerable scope in this sector, particularly as the Government and many Local Authorities are actively encouraging the repurposing of these spaces for residential use.
Recognising the potential of retail and commercial premises to have a future mixed use or residential use is an important consideration for existing owners and potential purchasers of commercial properties and, if it is felt that a property might have some potential, just contact us in Durrants Building Consultancy and we will be only too happy to give you some initial, informal advice which hopefully will assist!
