Office to Residential Conversions – Why you Should Stick to Renting Out Your Commercial Property

Since changes in the law in 2015, we have been seeing growing numbers of people who are converting their office spaces into residential buildings. According to private wealth law firm Boodle Hatfield, the number of office buildings that were approved for conversion into residential has increased by 24% since last year.

Whilst it is clear that there is a housing crisis in the UK at the moment, and there is now a greater need for affordable housing than ever before, there are still many benefits to keeping your commercial premises as just that – commercial premises.

Whether you are using the property for yourself or your business to work in, or you would prefer to advertise it for rental, here at Boxpod, we think that keeping it as a commercial property is a great option for you. There are, of course, pros and cons to converting your commercial property into housing, and in this article, we are going to look at what these are and what this means for you and your property, aiming to help you to decide whether it is a good idea for you or not.


If you are thinking about converting your commercial property into residential housing, there are several elements that you should consider before making up your mind. These include:

Property Type

Not all commercial properties are suitable for conversion into housing. Of course, you need to have the space, but there are also some other aspects that you should think about, for example, your property might not be suitable if it:

  • Is located within a designated area of scientific interest
  • Is located within a designated area of natural beauty
  • Is located within a national park
  • Is located within a conservation area
  • Is a listed building
  • Is located within a safety hazard area
  • Is located within a military explosive zone

If your property falls within one of these groups, it does not mean that you cannot convert it into residential housing, but you should consult the rules and bear in mind that you might need to speak to your local planning department for permission.

Costs of Conversion

Although you might not be building a property from scratch, there can be significant construction costs associated with making your commercial property suitable for residential occupation (depending on the nature of the building). If, for example, it was previously a residential property, it should not be too much work to return it back. If, however, you have a purpose-built office block or warehouse, it might require significantly more work for it to get to the right standard.

You should bear in mind that structural work might be required and this can be very expensive for you.


If you are thinking about converting your commercial property into residential homes, you need to be able to attract tenants or new buyers. This means that it needs to be an attractive place to live – perhaps not, for example, ideal if you have a warehouse out of town and beside a motorway. Some of the factors linked to the property’s location include:

  • Transport links (roads, and public transport)
  • Schools nearby
  • Noise pollution – roads, airports, nearby factories, etc.
  • Local amenities – shops, cafes, bars and restaurants, Post Office, etc.
  • Parking (residential and for visitors)
  • Construction workers’ access

Unless you have a retail unit, it is often the case that commercial property and residential property prosper in opposite locations. It can be a good idea to consider whether you would like to/be able to live there before you decide whether to convert your commercial property into residential homes.


Tied in with considering the costs of converting your property, there are other financial aspects to think about. You might, for example, need to get a mortgage to be able to carry out the construction work on your property. You will need to be confident that you could meet your mortgage repayments (even if the property is sat empty for a while) and cover your costs through the rent that is paid.

You might also need to consider taking out extra insurance to cover you for the time that there is development work going on.

Development Work

In order to make a commercial property liveable, there are a number of elements that must be considered. Some elements must be suitable for residential properties, for example:

  • The property’s plumbing
  • The property’s electrical safety
  • Fire safety within the property
  • The property’s heating
  • Ensuring that any hazardous material is removed (safely)

Use Classes and Permissions

In the UK, buildings are segregated into different ‘use classes’. In general, these classes are:

  1. A – buildings that provide professional services – including shops, restaurants, and other businesses
  2. B – buildings that include offices, warehouses, and storage facilities
  3. C – residential properties such as houses and flats, including care homes and hotels
  4. D – miscellaneous buildings, such as cinemas, leisure facilities, schools, doctor’s surgeries

If you are going to convert your commercial property (usually an A or B class), you will need to apply to change its class to a C class. It is important to note that this is not the same as planning permission – you might need to apply for this separately.

You may also need to get prior approval from your local council if you are, for example:

  • A shop
  • A showroom
  • A bank
  • A hairdresser
  • A retail warehouse
  • Light industrial premises
  • Professional services

Given the changes in working habits that we are seeing in the UK and housing shortages that we are currently experiencing throughout the country, it might seem that converting your commercial property into residential housing is a great idea. However, there are many obstacles that can get in your way, and it will not definitely have the best outcomes for you.

Instead, you can rent your commercial premises to businesses that are looking for somewhere to base themselves, and here at Boxpod, we can facilitate this for you.


Looking to expand or grow your business? Find your perfect space on Boxpod.

Do you own or manage commercial space? Advertise it on Boxpod.

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