Business districts in the UK are experiencing a unique challenge in the wake of the pandemic. Commercial building owners are struggling to fill vacancies as companies and their employees are opting to trade their office spaces for remote work.
As a result, businesses like retailers and restaurants that once thrived on foot traffic coming from these offices are struggling to stay afloat.
In turn, the UK government is working on new financial initiatives that could kill two birds with one stone: converting these empty commercial buildings into homes.
If you're a property owner and you've ever considered repurposing your commercial property into residential spaces, now is the moment to explore the following options.
Building Conversion Grants
The Cheshire West & Chester Council has made a grant available specifically for commercial to residential conversions. The grant covers up to 50% of the cost of the eligible work to a maximum of €10,000 per apartment in the building. If you're working on a larger project that involves multiple units or components, the overall maximum grant amount is set at £50,000.
You must meet the following requirements:
- The property has to have been vacant for at least 12 months
- Planning permissions have been granted
- The Council has deemed the property suitable for residential living and is in an area where housing is needed
- You possess rights or stake in the property
To apply, the Council will request architectural plans, planning permissions, building regulation approval and a schedule of construction. Along with these documents, you will also be asked to provide two quotes of estimated construction costs. from contractors. Then, an officer from the Private Sector Housing Team will inspect the property before construction begins.
If granted, you will also be asked to follow several conditions:
- You, as the owner, must become a member of the Cheshire Landlord Accreditation Scheme
- You must rent out the units at an affordable rate or below and allow the Council to nominate tenants for five years
- The property must meet the Government’s decent homes standard and be occupied before payment of the grant
- The conversion must be completed and occupied within 12 months of the grant being granted.
If this grant sounds like something that would interest you, you can email firstname.lastname@example.org for more info and receive an application.
Enterprise zones are areas defined by Local Enterprise Partnerships. Commercial properties in these zones are eligible for incentives like tax breaks for certain developments.
Enterprise Zones are strategically located areas that present a golden opportunity for property owners seeking to repurpose their commercial spaces. Often situated in key economic hubs, these zones are designed to encourage regeneration and provide a favourable environment for redevelopment projects.
Owners with properties in these zones can be entitled to a business rate discount of up to 100% over a five-year period.
Aside from financial incentives, there are also benefits in the permitting process. Property owners engaging in projects within these zones may experience more efficient approval processes, reducing bureaucratic hurdles and facilitating a smoother transition from commercial to residential use.
Contact your local authority or council responsible for the Enterprise Zone to learn how you can receive these benefits for your project.
Permitted Development Rights (PDRs)
Permitted Development Rights grant property owners the authority to make specific changes to their properties without the need for a full planning application. These rights are outlined in legislation and cover various alterations, including changes of use from commercial to residential.
When working with a large project like a conversion, shortening the timeline where possible can help cut considerable costs.
While not all commercial properties may benefit from these rights, specific classes of commercial buildings are eligible for conversion under Permitted Development Rights. Understanding the permitted classes and their associated criteria is crucial for property owners seeking to embark on a commercial-to-residential conversion journey.
Working with a planning consultant, architect, or other experts familiar with PDRs can help navigate the process and ensure compliance with regulations.
In the UK, Housing Associations, also known as Registered Providers, play a pivotal role in the nation's affordable housing landscape. These nonprofit organisations are dedicated to bridging the gap between housing demand and supply, particularly for those with modest incomes.
Beyond financial support, Housing Associations bring a wealth of expertise and resources to the table. Their in-depth knowledge of the local housing landscape, coupled with experience in navigating regulatory frameworks, proves invaluable for developers navigating affordable housing initiatives.
Below are just a few of these Housing Associations that can assist with your commercial-to-residential conversion:
- Clarion Housing Group
- L&Q (London and Quadrant Housing Trust)
- Sanctuary Group
- Notting Hill Genesis
Many of these associations will have stipulations like requiring that rents on these new apartments stay at an affordable rate for a certain amount of time. However, collaborating with these organisations will unlock a wealth of resources and knowledge that can help your project run smoother.
Next Steps to Converting Your Commercial Building
While each funding option comes with its unique features and considerations, the overarching theme is clear: the UK is invested in fostering a resilient, inclusive, and sustainable housing sector. By staying informed, engaging in proactive dialogue with relevant authorities, and embracing collaborative partnerships, property developers can unlock the full potential of their commercial spaces, ushering in a new era of purposeful and community-centric residential developments.
Whether your focus is on revitalising urban landscapes, contributing to affordable housing initiatives, or simply transforming underutilised spaces, the funding options are a powerful toolkit to turn visions into reality.
Discover the potential within your property with Volumetric Building Companies (VBC). VBC has been pivotal in ushering in this conversion movement. From design to financing to construction, our team can help you every step of the way. Contact VBC today to initiate the transformation.