Office to residential conversion

In an effort to tackle the housing shortage in the UK, the government has pledged to build 300,000 homes per year by the mid-2000s. But with housing still in short supply, many are taking matters into their own hands.

In addition to the government’s initiative, another solution to the housing crisis is to convert office buildings into residential apartments. The increase of tech start-ups in recent years has seen many employees ditch the traditional nine-to-five office job in favour of more flexible working conditions. This has given commercial property owners and investors more opportunities to maximise their returns on buildings they own while providing more housing to those who need it.

Office-to-residential conversions are even more viable as more businesses are adopting a working-from-home model since the COVID-19 pandemic. Plus, a relaxation of the rules around converting offices means the government is in favour and is actively encouraging these conversions.

If you’re considering converting a commercial space into a residential one, you may find it helpful to read this article first. We’ll take you through the rules for doing so, suggest some things to consider before you go ahead, and list the pros and cons of office-to-residential conversions.

Can I convert an office into a residential building?

You are allowed to convert your office space into a home as long as specific regulations are met. Some of these regulations concern space, light and location.

If you believe your property meets these regulations, you will need to submit a prior approval application, which should include a full set of drawings, an assessment of contamination and flood risks, a noise implications report and a transport and highway impact survey.

Continue reading to find out more.

How do I convert an office into a residential building?

Before you start putting your office-to-residential conversion plan into action, some of the things to consider and questions to ask yourself are:

  • Light — Are there enough windows?
  • Location — Is the space close to amenities and transport links?
  • Practicality — Are all the rooms habitable?
  • Size — Is the space big enough to live comfortably? 
  • Ventilation — Is the space well-ventilated?

You will also need to make sure there are enough staircases to get people out of the building safely in the event of a fire.

Another thing to think about is parking. Many offices are located in town centres, which usually means limited parking spaces.

Some of the other things to consider are storage for bikes and bins. When doing an office-to-residential conversion, you are not allowed to create new doorways, so check whether the building has existing doors for you to get bikes and bins in and out of. If you need to sacrifice a flat to make space for bike and bin storage, weigh up the financial impact this will have on your project.

If you believe the space is suitable for a residential conversion, you will then need to submit a prior approval application to your council or local planning authority. This usually costs £100 per dwelling, up to a maximum of £5,000. In your application, you will be required to include a detailed set of drawings, as well as supporting documents relating to contamination risks, flood risks, noise and transport and highway impacts of the development. The council will then have 56 days to approve or reject your application from the date you submit your application. If your proposal complies with the prior approval scheme, they will have to approve your application and will not be able to impose additional planning policies when making their decision. If your application is successful, you will be allowed to convert your office building into residential dwellings under the updated Permitted Development Rights (PDR) laws, which we will explain in more detail in the next section.

Before you start work on the building, it is important to do some research into reputable developers to ensure that the conversion is not only done to a high standard but that it complies with the government’s mandatory Housing Health and Safety Rating System (HHSRS). The HHSRS was introduced to make sure all habitable dwellings provide a safe and healthy environment, free from avoidable hazards. It is also a good idea to choose a developer that adheres to Nationally Described Space Standards (NDSS). While NDSS is an optional requirement, it is for the best because it ensures that sufficient space is allocated for bathrooms, food preparation, sleeping and storage.

Do you need planning permission to change from office to residential?

Permitted Development Rights (PDR) were introduced to allow property owners to develop their premises without planning permission. However, in some cases, you will need to apply for it.

If an Article 4 Direction applies to the site on which your office building is situated, the development could be rejected, meaning you will need to apply for planning permission. So it is a good idea to check with the council before you start any work. Local authorities use Article 4 to protect the character of an area of importance, for example, a conservation area.

You may also need to apply for planning permission if you want to remove walls or build an extension. This is because prior approval only applies to the building’s change of use and not the conversion itself.

If you meet certain obligations, though, PDR allows you to convert your office space without planning permission. These rights were introduced in 2013 and then changed to become more flexible, first in 2020 and then in 2021. Most Class E (business, commercial and service use) buildings can now be converted to Class C3 (residential use) buildings without planning permission. This right is known as Class MA.

Office to residential conversion restrictions

While most commercial spaces can now be converted into residential dwellings, there are restrictions. Some of these are:

  • A space used for business purposes — The space you want to convert must have been used for business purposes for at least two years.
  • A vacated space — The space must have been vacant for three months before the date on which you submit your prior approval application.
  • Certain areas and types of buildings — Class MA cannot be used in certain areas, such as a National Park, an Area of Outstanding Natural Beauty, a World Heritage Site, a Site of Special Scientific Interest and certain parts of towns and cities. Nor can it be used for a listed building. With planning permission, however, you may be able to use it in a conservation area.
  • Size limit — You are now only allowed to convert 1,500 square metres. However, if you own a whole building rather than a single office, you do have the freedom to fill the rest of the building with businesses that work well with apartments, such as shops, cafes and gyms.
  • Standards — All conversions must meet the required standards and regulations. 
  • External changes — You are not allowed to make external changes to the building.

What are the pros and cons of converting an office into a residential building?

It is important to weigh up the pros and cons of converting an office space into a residential dwelling. Each space is different, which means some conversions may work better than others. With that in mind, here are some advantages and disadvantages to consider:

Cons

  • Conversions are usually subject to lower requirements than newly-built homes. For example, office spaces tend to be smaller than purpose-built residential homes, meaning tenants have less space. Additionally, many office-to-residential conversions lack communal or outside space.
  • If you are selling, the buyer may struggle to get a mortgage if the space is less than 30 metres squared.
  • Without planning permission, you are limited when it comes to the design and quality of the conversion.
  • Office conversions are often in busy locations, meaning noise could be a problem for residents.

Pros

  • You can benefit financially from the space you own, which could otherwise be left empty as an office.
  • You will be contributing to the efforts to solve the housing crisis in the UK.
  • Conversions tend to be cheaper than purpose-built homes, meaning you can help younger people to get onto the property ladder in prime city centre locations.
  • These types of conversions can benefit the UK economy.
  • High streets can also benefit from regeneration.

Summary

With an increasing number of people choosing to work from home rather than in an office environment, commercial property owners are developing their office spaces into residential dwellings. If this is something you are considering, some of the things to think about are whether the space has enough space, light and ventilation. You will also need to consider parking and bike and bin storage.

If you believe your space is suitable for a residential conversion, you will need to submit a prior approval application. In your application, you will be required to include a detailed set of drawings, as well as supporting documents relating to contamination risks, flood risks, noise and transport and highway impacts of the development. The council will then have 56 days to approve or reject your application. 

If your application is successful, you will be allowed to convert your office building under the updated Permitted Development Rights (PDR) laws. These were introduced to allow property owners to develop their premises without planning permission, although, in some cases, you will need to apply for it. But while most commercial spaces can now be converted into residential dwellings, there are some restrictions. Some of these are that the space must have been used for business purposes for at least two years and have been vacant for three months, buildings in certain areas cannot be converted, and you are not allowed to make external changes to the building.

Some of the disadvantages of office-to-residential conversions are that office spaces tend to be smaller than purpose-built residential homes and offices tend to be in noisy locations, while advantages include financial reward, helping to solve the UK’s housing crisis and benefitting the economy.