Commercial to resi conversions have ‘potential’ for affordable housing but risks remain

The All Parliamentary Group for Ending Homelessness launched a joint inquiry with the APPG on Housing Market and Housing Delivery into Housing Solutions for Homeless Households earlier this year to explore views on how office and commercial space could be converted into affordable housing for those experiencing homelessness and low-income households.

Propertymark was consulted, interviewing members of its advisory panel and sending out a survey to gauge responses.

Propertymark said that “in principle” it was “supportive” of converting vacant or underutilised commercial property for use of developing new homes.

However, it said that there were key issues to address in order for such conversions to be successful.

This include setting standards to ensure “quality homes” are delivered and such conversions meet needs of residents.

By setting standards it will “prevent conversions being isolated in areas and opportunistic development”.

Propertymark members highlighted that suitability needed to consider location, energy performance, size of the building and the ability to deliver the necessary infrastructure within the building.

Another issue was that the suitability of each conversion would need to be “reviewed individually” as Propertymark members said they were worried some would “not meet the standards of homes that you would expect”.

One example is the requirement of residential properties needing 24-hour heating and water, which commercial properties do not offer to the same extent as residential properties.

It added that commercial to residential conversions would also need a “substantial refit of building materials and internal plumbing systems”.

Propertymark members added that there would need to be “consistent application through the planning system”.

“This is to ensure consistent approval of conversions which will provide confidence to developers and ensure that poor quality conversions are not approved,” it noted.

Conversions would also need to be financially viable, otherwise they may not be delivered, and many would not be “financially viable or suitable for residential use”.

Propertymark members were in favour of grant funding as opposed to cuts to residential property tax to encourage conversions.

Conversion on a case-by-case basis

Henry Griffith, policy and campaigns officer at Propertymark, said: “Propertymark has long advocated for a range of measures to improve the housing supply crisis and very much welcomes this joint inquiry to explore converting commercial property as a potential solution.

“There are certainly instances when conversions can be suitable, however, we have made it clear in our response that the suitability of the property for conversion must be reviewed on a case-by-case basis.”

He added: “Commercial properties are incredibly varied and often require substantial work in order to be suitable for residential housing. Conversions must be made with the proper regard for the quality of living and suitability of the conversion, or we would risk the creation of low-standard housing and isolated communities when there are alternative measures to increase housing supply.”