Commercial to Residential Conversion in UK: Everything You Need to Know in 2024

What is a commercial to residential conversion? 

The term commercial to residential conversion refers to a commercial property that is repurposed into a residential home. This could be office space or retail property that is developed into residential flats. Commercial to residential conversion is becoming an increasingly popular investment strategy that can yield some attractive returns.   

This strategy is usually preferred by high-net-worth individuals, business angels, and company directors who want a good return on their investment. These are typically large, exciting projects that require a higher level of investment capital but yield a high percentage return—so if you’re looking for a little thrill as well as the potential for a large profit, this is a great option. 

What to consider when it comes to commercial to residential property conversions  

Although Commercial to residential conversions usually have higher returns, they also usually come with higher risks. Here’s what you’ll need to consider before getting started: 

• You’ll need permission from your local council  

Any commercial to residential conversion will require planning permission. This of course takes time (and patience). Investors will be required to contact a local planning authority (LPA) to ensure that proposed work complies with building regulations. Application fees usually varies between £96 and around £462 for full planning permission change of use. 

• You’ll need to have patience 

These type of returns also require patience as typically more time is required before you start seeing a return. Unlike the rent-to-rent property strategy which usually has quick returns, you’ll need to exercise more patience when it comes to commercial conversions.  

• Be prepared for higher costs:

Commercial property is typically more expensive that residential property. However, the cost will depend on location, size and of course, the state of the property. It’s worth noting that the decline in demand for commercial property can often mean that some commercial properties that have been vacant for a long time can be well priced.