A seems that a lot of residential properties are being converted into commercial properties for use as offices or serviced offices. Conversely, a huge amount of commercial properties, in the docklands etc are being turned into residential properties. Doesn’t really seem to make any sense. But if you look a little deeper then you can see why it is happening.
Firstly; converting commercial into residential. In Wednesday’s Budget chancellor George Osborne scrappeds the requirement for planning approval to convert a commercial property to residential use. The government believes this could create 250,000 new homes, as empty office space is converted into homes for first-time buyers. It is estimated this could save up to £140m in costs over the next 10 years. When you consider that last year only 129,000 new homes were built in England then one can see that this is a big incentive to the building industry.
Let us remember that it has been reported that the Institute for Public Policy Research forecasts a shortfall of residential properties of up to 750,000 by the year of 2025.It is expected that the government’s initiative will be beneficial not only for UK homeowners, but for investors and landlords as well. I am sure that those who are at risk of defaulting their commercial property mortgages due to the recession will gladly convert commercial properties into residential and sell them.
On the flip side of the coin, many large properties in smaller towns and cities, such as Canterbury, are lying unoccupied as they are to large for families and the building regs to convert to flats are to onerous and expensive. However – these large Victorian properties are perfect for converting into Serviced offices or executive suites. And because they are often situated in mixed areas sandwiched in between existing offices and shops it is very easy to get change of use permission. This is a great way to add huge value to an otherwise fallow unit.
