Owning a Listed Building: The Pros and Cons

There are some buildings in the UK that are described as ‘listed buildings’. But what exactly is a listed building, and what does this mean if you own one? It can be exciting to own a listed building, but it may come with certain responsibilities and restrictions that you should be aware of. Read on to find out more about what it means to have a listed building, whether or not listed buildings are a good investment, the pros and cons of owning a listed building, and more.

Table of Contents

What is a Listed Building?
Why Does a Building Become Listed?
Different Types of Listed Buildings
Are Listed Buildings a Good Investment?
Pros and Cons of Owning a Listed Building

What is a Listed Building?

A listed building in the UK is one that has particular significance or interest due to unique architecture, age, or cultural or historical value. They are known as ‘listed’ buildings because they are added to one of four lists in England, Scotland, Wales or Northern Ireland. These lists are maintained by government authorities such as Historic England, who work to protect and preserve the historic environment of the country.

Listed buildings cannot be demolished, altered or extended without permission from the local planning authority, and if any maintenance is required, it needs to be done by heritage builders who use historic techniques and materials to preserve the building appropriately. Not all listed buildings are properties – they can be any structure, such as a bridge, monument, sculpture, road sign, or even a telephone box. There are around 500,000 listed buildings in England which can be found on the listed building register.

Why Does a Building Become Listed?

Buildings are listed to protect them from any alterations that could affect or detract from their architectural or historic interest, and as such, building consent is required for any modifications. The older a building is, the more likely it is to be listed, as older buildings are an important historic record of the past. Anyone can apply to Historic England or the relevant authority to have a building considered for listing. Some buildings can have parts of them added to the list, meaning that other renovations of the property can take place as long as they don’t affect the listed parts, e.g. an original floor mosaic.

Different Types of Listed Buildings

There are 3 main types of listed buildings here in the UK which include:

Grade I Listed Buildings

These are buildings or structures considered to be of exceptional interest, such as Buckingham Palace or the Royal Albert Hall – both are Grade I listed buildings. 2.5% of all listed buildings have Grade I status. It’s unlikely that Grade I listed buildings are residential properties; they are usually cathedrals, castles or other important buildings, but there are a few, usually very old houses, e.g. pre-1700, or very grand properties like stately homes.

Grade II* Listed Buildings

Grade II* listed buildings are still considered particularly important, but not quite as much as Grade I. About 5.8% of all listed buildings are Grade II* listed, often due to a high quality of craftsmanship, being a good example of a certain architectural style, or because a famous historic figure once lived there. They are often churches, libraries or other similar types of buildings, but they can be residential properties too.

Grade II Listed Buildings

This is the most common type of listed building and has the least significance, but they are still considered important and should be preserved. Around 91% of all listed buildings are Grade II, so if you buy a listed building, chances are it is Grade II. Most residential properties that are listed have Grade II status, usually due to original period features, architecture, or similar cultural and historic significance. Understanding the Grade II listed meaning is essential for owners, as it comes with certain obligations and regulations.

Are Listed Buildings a Good Investment?

Owning a listed building as an investment property can be potentially rewarding, as they are usually highly sought-after properties in great locations that can command a high rental yield or resale value and tend to appreciate in value quicker than regular properties. There are only a small amount of listed buildings so this can make them a good investment, especially for those who have more long term financial goals. Listed buildings often require a lot of maintenance and repair, so any potential investor would need to be prepared to invest a significant amount of time and money into keeping the property in good shape. A listed building could make a good property for holiday lets and luxury accommodation, and the right investor who is prepared to put the extra time in could make substantial profits from this. However, owners must also be aware of Grade 2 listed restrictions that could impact their ability to modify the property to suit modern needs.

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Pros and Cons of Owning a Listed Building

There are several benefits and drawbacks of owning a listed building that you should be aware of as a property investor, including:

Pros of Owning a Listed Building

Owning a building with a unique and special character can be pretty interesting, especially to someone who takes an interest in history, architecture and culture. Living in a listed building can make one feel like a part of history.

Listed buildings are often in very popular locations, either within towns and cities or in the countryside, and are often sought after as residential properties or even hotels.

Listed buildings often appreciate faster than normal properties, so they can be a great long-term investment.

While it can be expensive to do the required maintenance and repairs for a listed building, there are some grants available from Historic England and other organisations that can help to cover the cost.

Cons of Owning a Listed Building

Doing regular repairs and maintenance on a listed building requires specialist knowledge and materials, and this is often more costly than usual properties.

Listed buildings often need more maintenance and repairs than regular properties, which can be costly.

Listed buildings need to be conserved and maintained, and the local authority can even issue a repairs notice under the Town and Country Planning Act if they think the building is not being maintained appropriately, or even make a compulsory purchase order if the building may fall into disrepair.

You cannot add extensions or some renovations to a listed property without consent, and often that consent will not be granted if they will significantly change the character of the property.

Living in a listed building is a pretty romantic idea, but in reality, they are often not suited to modern living and can be draughty, damp and cold, with some inconvenient features that you aren’t allowed to remove. Any renovations to modernise the property may not be authorised.

It can be harder to get property insurance for a listed building, and you may need to use a specialist insurer, which can be more expensive.

You would be responsible for fixing any previous work carried out on the building that was done without proper consent.

Unauthorised work done on a listed property can incur an unlimited fine or even a prison sentence of up to two years.

If you do want to invest in a listed property, always consider the pros and cons above. Do through research on the property to find out why it is listed, look up any previous renovations or other work done on the property and make sure it was authorised, get advice from experts in listed buildings like surveyors who specialise in the exact type of property, e.g. one who specialises in Victorian buildings if that’s the kind of property you want to buy. This may seem like a lot of work, and while listed buildings aren’t the right choice for every investor, they can be very rewarding to those who are prepared for such a unique opportunity.

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