Main challenges for a change of use properties

Change of use properties present unique opportunities and challenges for estate agents. At times, it can make economical, logistical, and practical sense for a property owner to change the use of their property or invest in a building that has great potential. Whether it’s converting a residential building into a commercial one or investing in something with potential for change, it’s important to understand what the process entails. 

Knowing what repurposing properties means can help estate agents advise anyone who may be considering a change of use. Likewise, recognising if a vacant building or a building that is up for auction is a feasible option to change its use is also useful. This article defines ‘change of use’ and outlines some key challenges and guidance in this area.

Defining ‘change of use’ in property

Change of use typically comes up in reference to whether planning permission is required to alter the primary function or purpose of an original property. This can involve transforming a residential property into a commercial space, converting an office building into apartments, or repurposing an industrial site for retail use. 

There are various categories for different change of use classes, and moving from one class to another often requires permission and careful consideration of various factors. Before planning or deciding on whether a change of use is feasible, it’s advisable to consult a team of surveyors to understand everything, from project management and maintenance to repairs and physical alterations.

Listing examples of altered buildings 

Changes of use in properties refer to alterations in the primary function or purpose of a building or land. These changes are categorised by Use Classes, as defined by the Town and Country Planning (Use Classes) Order 1987 (as amended). Some examples of changes of use include:

  • Residential to Commercial: Converting a house into an office or a shop
  • Commercial to Residential: Transforming an office building into flats 
  • Industrial to Retail: Changing a warehouse into a retail store 
  • Institutional to Residential: Converting a school (Class F1(a)) into residential dwellings
  • Retail to Hospitality: Changing a shop into a restaurant or café
  • Office to Hotel: Converting an office building into a hotel
  • Retail to Community Use: Changing a shop into a community hall 

Although there are other examples, it’s important to note that some changes of use may occur within the same ‘Use Class’, while others involve moving from one Use Class to another. Depending on the specific change and any associated building work, planning permission or prior approval may be required. Additionally, building regulations must be considered for any proposed change of use.

Outlining ‘use classes’ and permitted development rights

Understanding the current use class of a property and the desired new use is an important consideration for estate agents before they share their insights with vendors. Certain changes of use are allowed under the Permitted Development Rights, which might allow, for instance, letting offices be converted to homes without planning permission from the local authority. Recent changes to use classes, such as the introduction of Class E, have simplified some commercial, business, and service use changes. 

However, Permitted Development Rights are subject to change and may have conditions attached. Additionally, some areas have Article 4 Directions in place, removing certain Permitted Development Rights. Estate agents should stay updated on the latest regulations and be able to advise clients on whether their proposed change falls under Permitted Development Rights or requires full planning permission.

Understanding planning permission

One of the most significant hurdles in change of use projects is obtaining the necessary planning permission. The Town and Country Planning (Use Classes) Order 1987 (as amended) outlines the various use classes, and moving between these classes often requires explicit permission from the local planning authority. 

Estate agents face challenges in navigating the planning application process and policies, meeting local planning policies and guidelines, and addressing potential objections from neighbours or community groups. Meanwhile, obtaining approval can take time and be unpredictable. To support any potential clients who might be looking to lease a commercial property, agents should familiarise themselves with local planning policies and expectations.

Prioritising building regulations and safety standards

Changing a property’s use will require the owner to be aware of the Housing Health and Safety Rating System (HHSRS) in addition to considering current building regulations and safety standards. Fire safety requirements may differ between residential and commercial properties, while accessibility standards for commercial properties are often more stringent. Energy efficiency regulations may require upgrades to meet new use standards. 

Estate agents should be prepared to discuss potential renovation costs and timelines associated with meeting these standards, as they can significantly impact the feasibility and budget of a change of use project.

Identifying any financial implications

Change of use projects can have significant financial implications for property owners and investors. These may include potential increases or decreases in property value, changes in business rates or council tax liability, and costs associated with renovations and compliance with new regulations. 

On the positive side, there may be potential for owners and investors to calculate and achieve increased income or generate new revenue streams from a change of usage. 

Recognising any environmental or community impacts

The environmental impact of a change of use is increasingly coming under fire by planning authorities and local communities. Estate agents should be prepared to address concerns about issues, including:

  • Potential of increased traffic
  • Possible disturbance of natural habitats, the impact on green spaces
  • Additional parking requirements, 
  • Noise pollution (especially when changing to commercial or industrial use)
  • Waste management and recycling facilities

Changes in property use can significantly affect the local community and neighbourhood dynamics. It’s worth being prepared for potential opposition from local residents or businesses concerned about changes in traffic, impacts on the local economy, and even protests from local and national groups volunteering to preserve green spaces from industrial development of any kind.

When properties change, particularly period or listed buildings, then preserving their heritage becomes a consideration. For properties in conservation areas or listed buildings, change of use presents additional challenges. Therefore, for agents dealing with heritage properties having a good understanding of conservation regulations and the unique challenges these properties present is valuable. 

Change of use properties offer exciting opportunities for property owners and investors, but they also present a complex web of challenges. To support change of use proposals in commercial or residential property sales or negotiations, agents may need to conduct or commission market research, providing valuable insights to their clients and helping them make informed decisions about the potential success of their investment, and be well-positioned to offer expert advice.

Written by Agency Express guest writer Annie Button