The UK along with the vast majority of European countries has seen a continuous strain on the economy in recent years. Major high street chains such as Woolworths, JJB Sports, MFI, Comet and now Jessops have all been hit particularly hard by the recession, and as a consequence gone into administration. Naturally, this has a direct knock on effect to the commercial property market which sees an increasing amount of buildings sitting empty with rental demands at an all-time low.
To combat this, landlords are opting to transform their commercial properties into residential ones to appeal to a market that offers considerably more demand and potential, especially for rental properties, as mortgage lenders continue to set stringent requirements. Before you begin converting your commercial property into a home or flats, there are of course some factors to consider.
The first consideration that you will need to make is how much the conversion is likely to cost, and whether or not you can afford to complete it to the standard you want to. For those landlords that have renovated properties in the past, it’s important to remember that commercial properties are a different kettle of fish altogether, much because of the hidden costs involved.
Sadly, a great deal of commercial property renovations are plagued by hidden costs that often result in the project being cancelled, postponed or abandoned half way through. The most significant setback tends to be the cost of labour, as highly trained professionals are generally required to make the changes that are required to fit the strict residential building standards.
Another drawback can be that your building may be subject to particular building requirements, such as Part L Regulations, relating to the conservation of fuel and power, or Part P, electrical safety. This means that it’s essential that you carry out as much research regarding the property and its requirements as possible before any work begins.
Vast ranges of commercial properties tend to be located in town or city centres to ensure that they benefit from any potential passing trade. Because of this, your building may not be as accessible as potential tenants or new owners want it to be. With parking and road restrictions in place in a great deal of large settlements, not many people will be attracted to a property where their car can’t be parked in the local vicinity or is surrounded by a complex traffic system.
Many potential tenants may also be put off by the idea of sharing an entrance with another flat or commercial property, so if this affects your building, this again is another serious consideration to take into account.
Although the Government has recently aimed to make it much simpler for landlords to convert commercial buildings into residential ones, there is still a great deal standing in the way before the transformation can be completed. Alterations to the outside of the property still need to receive planning permission, and in some market towns or particularly historic areas, there may be rules in place which mean that the outside of the property must remain in a certain way.
You’ll also need to think about the location and surrounding vicinity of your building. Is it located in a particularly noisy area, be this people or traffic? This is often an unattractive proposition for a lot of potential buyers or tenants, and is also likely to affect the valuation too.
Most property owners and landlords will find that it will take a considerable amount of time for the local council to approve the conversion. This is because they require the owner to prove that there is absolutely no demand for a commercial use of their property, and even then, some local authorities will insist that it is on the market for at least 12 months before a conversion can begin.
Eddisons Chartered Surveyors provide expert assistance in finding the right property for you, as well as offering on-going support of owners wishing to carry out a conversion. As specialists in property auctions in the North West of England, you can feel confident that Eddisons have the right commercial property for your requirements.