Converting a property can increase its value as well as the rental yield. The type of conversion you undertake will depend on your budget, the building itself and any permissions granted by the local authority.
It is important to select the correct property to convert, to choose a suitable type of conversion and to ensure that your plans comply with building regulations and planning requirements.
Property conversions can broadly be described using one or both of the following terms:
- Change of use: Converting the property from one use to another, for example from a shop to flats.
- Splitting: Dividing an existing building into smaller units, such as converting a large home into several apartments.
Understanding local housing needs
Understanding local housing needs will help you identify trends and decide which type of conversion is best suited to your area. For example, an area that is attracting young professionals may suit conversion of larger properties into one-bedroom apartments.
Planning permission
For most major changes to buildings, including extensions, conversions and change of use, planning permission is required. If the property is in a conservation area or is listed, additional consents may be necessary.
Even where planning permission is not required, building regulations will usually apply. Before you instruct an architect or builder, it is sensible to discuss your plans with the local authority.
Splitting units
Splitting large properties into smaller apartments or flats can be costly, but it may increase your overall return on investment if you manage the process well and satisfy local demand.
This process will usually require professional advice. Matters to consider include:
- Council tax: A large building may currently be subject to a single council tax band, whereas separate self-contained units will each have their own band.
- Utility meters: Each apartment or flat will need appropriate utility meters installed to the relevant standards.
- Energy performance: All dwellings must have a valid Energy Performance Certificate.
- Fire safety: Converted buildings with common areas must meet the required fire safety regulations.
- Sound insulation: Converted properties must be designed to limit noise transmission between units.
- VAT and tax: Renovation and conversion work may be subject to VAT and other tax considerations. Specialist advice is recommended.
- Insurance: Appropriate insurance cover, including public liability where works are taking place, is essential.
Change of use
The Town and Country Planning (Use Classes) framework groups various uses of land and buildings into categories known as use classes. If the proposed and current uses are in the same class, or if there is a permitted change, planning permission may not always be required.
To avoid costly and time-consuming remedial actions such as restoration or demolition, it is crucial to talk with the appropriate local planning authority about any proposed work.
Property conversions – FAQs
Do all conversions need planning permission?
Many do, but not all. Some changes may fall within permitted development rules. Your local planning authority or a planning consultant can explain how the rules apply to your specific project.
Should I speak to the council before instructing an architect?
It is often sensible to have an initial conversation with the planning department or a planning professional so you understand any key constraints before detailed designs are prepared.
Can conversions be financed with standard buy‑to‑let mortgages?
Sometimes, but many projects require specialist development or refurbishment finance during the works, with a longer‑term mortgage arranged once the property is complete. A broker who understands development finance can outline the options.
What extra ongoing costs might apply after a conversion?
Potential changes to council tax bands, higher maintenance requirements for common areas and different insurance premiums are all worth factoring into your projections.