Can You Convert Commercial Property To Residential? | Legal Clarity

Converting commercial property into residential property is growing in popularity and helping provide more housing, particularly in urban areas. As a result, this blog will explore what you need to know about whether you can convert commercial property to residential.

How to convert commercial property to residential​ property

When converting commercial property to residential, there are a few things you should do:

Ensure you understand local council regulations

Each Local Authority has its own regulations making it important that you understand your Local Authorities regulations before undertaking the project to ensure you can complete it.

You’ll also need to understand the change of use process that occurs when converting commercial property into residential. 

Ensure you understand what your property's current use class is

Commercial properties in England and Wales are given use classes (categories that classify how a building or land can be used). These classes are set by The Town and Country Planning (Use Classes) Order 1987, with significant updates in September 2020 with the view to simplifying planning. 

You need to understand what category your property currently falls under in order to know what steps you need to take to convert your commercial property into residential property.

What are property use classes?

Use classes are categories that refer to how a property can legally be used. Types of property use classes include:

• Class B - This typically covers industrial buildings (excluding chemical treatment or waste buildings) as well as storage and distribution centres for example:
  • B2 – General Industrial
  • B8 – Storage & Distribution - This class includes open air storage

• Class C - This covers residential buildings like homes, care facilities and hotels for example:
  • C1 – Hotels & Guest Houses
  • C2 – Residential Institutions (care homes, hospitals)
  • C3 – Dwelling Houses (houses, flats) this is split into three parts
  • C4 – Houses in Multiple Occupation (HMOs) (small shared houses for 3-6 unrelated people)

• Class E - This covers commercial, business or buildings for service purposes and is split into eleven parts for example:
  • Shops (formerly A1)
  • Restaurants and cafés (formerly A3)
  • Financial and professional services (formerly A2)
  • Offices
  • Research and development
  • Industrial processes (that can operate in a residential area)
  • Clinics, health centres, nurseries, and day centres
  • Gyms and indoor sports facilities

• Class F - This covers local community and learning centres and is in two main parts for example:
  • F1 – Learning & Non-Residential Institutions
    (Schools, museums, libraries, places of worship, public halls)
  • F2 – Local Community Uses
    (Village halls, local shops under 280m², swimming pools, recreation spaces)

• Sui Generis - This covers use types that are in a class of their own:

• Theatres
• Amusement arcades/centres or funfairs
• Launderettes
• Fuel stations
• Hiring, selling and/or displaying motor vehicles
• Taxi businesses
• Scrap yards, or a yard for the storage/distribution of minerals and/or the breaking of motor vehicles
• ‘Alkali work’ (any work registerable under the Alkali, etc. Works Regulation Act 1906 (as amended))
• Hostels (providing no significant element of care)
• Waste disposal installations for the incineration, chemical treatment or landfill of hazardous waste
• Retail warehouse clubs
• Nightclubs
• Casinos
• Betting offices/shops
• Pay day loan shops
• Public houses, wine bars, or drinking establishments – from 1 September 2020, previously Class A4
• Drinking establishments with expanded food provision – from 1 September 2020, previously Class A4
• Hot food takeaways (for the sale of hot food where consumption of that food is mostly undertaken off the premises) – from 1 September 2020, previously Class A5
• Venues for live music performance – newly defined as ‘Sui Generis’ use from 1 September 2020
• Cinemas – from 1 September 2020, previously Class D2(a)
• Concert halls – from 1 September 2020, previously Class D2(b)
• Bingo halls – from 1 September 2020, previously Class D2(c)
• Dance halls – from 1 September 2020, previously Class D2(d)

It’s important to note that as of September 2020, a number of use classes were revoked (classes A, B and D). You may still see references to the old use classes (some of which are listed above) and/or If you made project plans for a conversion prior to September 2020.  It is advisable to check with an architect that you’re still complying with the latest rules and regulations.

How do I change the use class for my commercial property?

Some changes between classes do not require full planning permission due to Permitted Development Rights (PDRs).

When planning your project you need to discuss with your architect whether or not you have PDRs. 

PDRs cover a number of alterations to residential property but also include the right for commercial property owners to change the use of some types of properties without applying for full planning permission. Instead, you can apply for approval to convert the use:

For example, 

• Class E (Shops and Offices) may be converted to residential property subject to prior approval in which the Local Authority may look at factors like flood risk, noise, and space standards, but importantly, full planning permission would not be required. 
• Agricultural Buildings may be converted to residential property without full planning permission but does require prior approval. This is also subject to 5 homes only that include size restrictions. 
• Light Industrial (B1c) Agricultural Buildings may be converted to residential property without full planning permission but does require prior approval.

Other factors should also be taken into consideration for example, if the property is a listed building then PDRs do not apply. Local Authorities can also still restrict development in certain areas such as city centres and conservation areas. 

If it is established that you do not have PDRs then you will need to apply for planning permission. You can do this by submitting a change of use application to your Local Planning Authority (this is usually your local council). The council will review your application and either review or deny it. 

Your property will also need to meet building regulations and you must check if you need approval before you undergo construction or changes to the property. Approval doesn’t need to be obtained by yourself if you use someone registered with a competent person scheme.

Engage with professionals

Engaging with professionals like contractors, architects and legal experts will help reduce the chances of issues occurring. Liaise and work with professionals who have experience working on projects like your proposed one to ensure everything runs smoothly and deadlines are met.

Consulting Commercial Property Solicitors for advice and guidance on how to change the use of your commercial property with your local authority will help you ensure your project is in line with change of use regulations. At Legal Clarity, our Commercial Property Solicitors are here to help you do just that. Get in touch with us today for further information.

How do you buy commercial property?

For those considering converting a commercial property without already owning one, there are several steps that you must follow during the purchasing process. Explore everything you need to know about buying a commercial property in our blog.