There’s never been a better time to convert commercial buildings into residential

That’s the view of Matthew Robinson, a senior architect as reported for regeneration magazine writing for newstartmag.co.uk. 

Robinson argues that there’s never been a better time to convert commercial buildings to residential use. That, he says, is because of changes to Class MA residential development rights. 

The article published by newstartmag.co.uk goes on to explain his though process through “the challenges that will inevitably present themselves.” 

What are Permitted Development Rights?

The General Permitted Development Order (GPDO) introduced Class MA conversion rights in August 2021. Class MA is a permitted development right that allows the change of use of a building from commercial to residential without going through the usual full change of use applications. 

It enables developers with commercial buildings (Use Class E) to convert to residential use (Class C3) using the permitted development (PD) rights order. Later amendments to the order were published in February 2024 commencing from the 5th of March this year have removed previous restrictions on the size of buildings to be converted, as well as the three-year vacancy rule.

This legislative change, argues Robinson, has created new opportunities for owners of some larger commercial buildings and those still in use, to convert them for residential use.

What restrictions apply?

There are some important restrictions that still apply to Class MA: 

• The building cannot be in an Area of Outstanding Natural Beauty (AONB), a Site of Special Scientific Interest (SSSI), or a National Park 
• The building must have a maximum floor space limit of 1,500 sqm 
• The building must have been vacant for at least 3 months immediately prior to the application 
• There are also some other site circumstances and limitations that may apply, including: 
• Transport 
• Flooding 
• Contamination 
• Noise 
• Adequacy of natural light 
• Fire safety 
• Impact on the character of a conservation area

The amendment came about following changes to the National Planning Policy Framework (NPPF) in December 2023. This put greater emphasis on utilising brownfield development and increasing density in urban areas. Class MA conversions the then government recognised offers a strategy which offers a practical method of achieving that goal.

“On paper commercial to residential conversions present a favourable option for developers, as they are generally quicker to deliver and are therefore a more cost-efficient option,” says architect Robinson. 

“When designed well, conversions can offer a meaningful contribution to the housing shortfall as commercial areas are usually well connected to public transport and within walking distance of local amenities. Having an existing building skeleton to convert rather than building new also reduces associated embodied carbon, therefore often making conversion the more sustainable option,” the article reports.

What hurdles still exist?

The latest amendments to Class MA rights still do not apply to listed buildings or those subject to Article 4 Direction*, within a site of scientific interest, outstanding natural beauty or agricultural tenancy, which does somewhat limit viability.

*An Article 4 Direction (A4D) is a planning regulation that allows local councils to remove permitted development rights in a specific area or property. This means that full planning permission is required for developments that would not normally require an application. A4Ds are used to protect the “well-being” of an area or local amenity or to protect businesses, jobs, and services in an area. 
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Design and building restrictions

For those development and conversion opportunities that do fall within Class MA rights, there are still challenges for conversions mainly relating to design including:

• access to internal and external natural light and ventilation
• ability to make improvements to the existing building fabric including thermal and sound insulation 
• provision of external amenity space, privacy and security. 

Commercial buildings often don’t lend themselves and were never designed for residential use. Internal configurations and access are subject to building regulations and external alterations may be subject to planning applications. 

Local authorities can throw many obstacles in a developer’s path. They will often find themselves at the mercy of a local authority’s officials. Though the initial planning regime is more direct under PD, the path to a completed residential conversion may become more complex than it appears initially on paper.

Choosing a development

The obvious things to check first are:

1. Assess demand – conduct rigorous research to determine the demand for housing, oversupply or undersupply and the liveability in the area. 
2. Even though you may be replying on PD, you still need to have a conversation with the local planning authorities and perhaps a pre-application to determine the specific planning permission requirements and the attitude of the planners for the area. 
3. Check for local restrictions as listed above, listed buildings, conservation area restrictions, for example. 
4. Building regulations must be met so an initial assessment of the building is necessary to ascertain of it is possible to overcome any BR restrictions.
5. Can the proposed room configurations meet national space standards?
6. Check for the availability of natural light to proposed rooms within the building.
7. Are there adequate existing window openings? Planning permission will be required to alter these which could be refused in some locations.
8. Is it possible to provide sound and thermal insulation to meet current and future standards? 
9. Check all the external considerations such as access, parking, amenities, security, light standards and landscaping.  
10. Check for covenant restrictions as to the use of the premises, access etc. 
11. Check the structural integrity of the building, general condition of walls, roof, basements, internal floors, stairways, lifts etc. 
12. Check the safety aspects, including electrical safety, fire safety, fire escape routes and requirements. 
13. Check for contamination hazards including asbestos, wet and dry rot and other hazardous materials. 
14. Conduct a rigorous feasibility study to assess the viability of the conversion. 
15. Consider the funding options available for the conversion. 
16. Seek professional advice: consult with professionals experienced in commercial to residential conversions, such as architects and planning consultants.

Some commercial buildings will pose a real challenge to the developer wanting to convert to residential. In some cases, it will not be possible to meet building regulations specifications, and some projects will simply be unviable on cost grounds. 

Here are some of the considerations a developer needs to be aware of according to architect Matthew Robinson:

What success strategies can you employ?

For any PD conversion project some of these challenges can be minimised by sourcing in the first place buildings that are best suited for conversion: 

• Buildings that were previously of residential construction are more readily converted back to their previous use. The proportions will be more appropriate say for room sizes, there are more likely to be suitable window openings giving extra light and there may be better security and potential for external amenity space.
• Suitable quality of the existing structure is vital, with proportions best suited to residential conversion giving suitable room sizes, access, light, space and security.
• Check for the existence of contaminants: asbestos, wet and dry rot etc will all add to cost which may make a project unviable.

To summarise, Matthew Robinson says, 

“The amended class MA PD rights will provide more brownfield development and more opportunities for housing within urban centres. There are, however, several considerations that will determine whether a building is suitable for conversion as outlined above.”

Robinson recommends engaging with architects and planning consultants at an early stage to help developers select suitable buildings for conversion and help avoid unforeseen challenges.