New research from Direct Line landlord insurance reveals a surge in applications to convert commercial, business and service premises such as offices and retail outlets for residential use.
Analysis of local authority data reveals a staggering 63% increase in the number of commercial to residential change of use applications made in the last two years, between 2021 and 2023, with approvals increasing 60% over the period.
The number of change of use applications in 2024 is on track to exceed last year’s figure by a further 20%, indicating a steady growth of opportunity for landlords looking to convert empty commercial buildings into sustainable rental properties.
While there is an undersupply of housing in England4, the rise in remote working and the retail sector’s continued transition to online has left many commercial properties underutilised or vacant.
NEW LANDLORD OPPORTUNITIES
This has created new opportunities for landlords with suitable commercial, business and service premises who can apply to convert suitable locations to help meet the nation’s soaring demand for residential property.
For landlords, converting these spaces into residential units can help to offer opportunities for greater revenue, long-term stability, and new streams of income.
London has seen the highest rate of growth in commercial to residential change of use applications between 2021 and 2023, with seven London Boroughs featuring in the top ten.
INCREASE IN APPLICATIONS
Haringey took the top spot, with a 100% increase in applications in the two years, while Enfield, Merton, Croydon, Ealing, Lewisham and Hackney also found their place in the list.
The data also revealed that Somerset (90% increase) Wakefield (70%), Bristol (68%), Sheffield (58%), and Milton Keynes (57%), have seen particularly high levels of change of use application approvals, with office space, retail outlets, and warehouses being repurposed to meet the growing residential demand.
CONSTANTLY EVOLVING
Jonny McHugh, Head of Landlord at Direct Line business insurance, says: “The property market is constantly evolving and as demand for residential property continues to soar, it has increased the attractiveness of converting commercial units for domestic use.
“By converting underused commercial properties into residential units, landlords can help maintain their revenue streams and future proof their investments.”
