Top Tips – Office to Residential Conversions
Permitted Development Rights allow any commercial property recently used as offices to be converted to residential use without needing full planning consent.
As a result, freehold buildings are attracting significantly higher values where there is the potential for change of use. Recent sales handled by Hicks Baker in Reading have achieved price premiums ranging between 15% and 45%.
Here are our top tips if you are considering buying an office building with a view to conversion to residential:
1. Prior Approval
You will need prior approval in respect of the transport and highways impact, contamination and flooding risks. Prior approval also relates to mitigating the impact of noise from nearby commercial premises on the eventual occupiers.
2. External Appearance of the Building
Any alterations affecting the external appearance will probably need planning permission.
3. Building Regulations
These still apply, although the simplified planning process has no space standards or requirement for affordable housing, for example.
4. Make sure the sums add up
You will need to factor in costs for SDLT, building works, finance, fees, and holding costs. Making sure that these sums do not run out of control and can be covered once the change of use has been completed is vital.
5. Market trends
Conversion to residential is leading to a shortage of good quality small office space in most Thames Valley towns. This may erode the premium for conversion as office prices rise.
6. The light industrial opportunity
From October 2017, Permitted Development will apply for a limited period to light industrial premises up to 500 sq m. These premises may be more economically sensitive for local planning authorities so proposals will need careful presentation.
For further information on the office market and opportunities for Permitted Development Rights in the Thames Valley, please contact Stephen Head, 0118 955 7089 or email firstname.lastname@example.org.