The shortage of residential housing in the UK is never far from the news pages. In a bid to kick-start development, the Government has made positive changes to the Permitted Development laws which mean you could be turning more types of property into your next buy-to-let investment – until 2017 anyway.

Could this mean that we’ll start seeing some of the deserted High Street shops around the country put to good use? Well, quite possibly. You can now turn a shop, bank or building previously used for professional or financial services into a family house or flat.

You can even turn an agricultural building into three houses, provided it was being used as such prior to you changing it into a residential property.

None of these buildings have to be empty at the time of change of use either. You can also do the associated works to make the conversion under Permitted Development rather than apply for further planning permission to make any external changes.

For example, with the office to residential change of use we saw a few months ago, the principle of the change of use was established as Permitted Development. However, any work to make it residential, mainly complying with building regulations (things like adding insulation may have needed external changes), would have required you to submit a separate planning application. Now, any work needed to make one of these buildings habitable, as long as it is within reason, can be done under Permitted Development too.

What to consider when purchasing a commercial property for residential conversion

These changes undoubtedly give landlords more of a choice when it comes to buying property, but there are certain factors to consider before jumping in to purchasing a commercial property.


Many commercial properties, especially those in Town Centre locations, may have limited parking available. Landlords or tenants might also be required to pay for a permit if there is no land with the property and even if that is the case, designated spaces may not be allocated.


Converting a previous ground floor shop into a one bedroom flat may seem appealing, certainly if it’s in a central location. But if no one else in the area has taken advantage of the new Permitted Development laws, then you have to ask yourself why? Tenants are unlikely to want all of the town’s retailers as their neighbours.

Cost vs. Increase in Value

The work required to convert a commercial property into a residential home and refurbish it can be costly. Sound insulation in particular is often very expensive. You should do extensive research into how much the full conversion will cost you, from purchase to letting, and determine what increase in value the property will experience and rental income will be generated. Is it still a viable investment?

Unfortunately the new guidance explicitly states that change of use to small HMOs is not covered. This is where you’d need expert guidance.

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