In the above 60-second YouTube video, I show how Ryan bought a run down pub for £130,000. He renovated it into 5 flats and an 8 bed HMO and it is now valued at £700,000. He made £250,000 profit! Commercial to residential is a big thing in property right now, including pub conversions. Many retail businesses are struggling and offices are closing as people begin to work from home more. Added to that, there have been a number of planning reforms that mean that now is a great time to get into this market.
In this article, I will take a look at 3 reasons why now is a great time to get into commercial to residential conversions.
1. Post-lockdown Changes
The lockdown is over and many people will be expecting things to go back to normal over the medium term. But people’s habits have changed. Many households that previously shopped on the high street are now more comfortable shopping online. Many office workers are asking their employers if they can continue to work from home, while many employers are wondering if the expense of office space is something they can do without entirely. Added to this, is the possibility of further lockdowns during winter when case numbers may see a rise again.
This uncertainty around commercial property means that there is a lot of room for converting it into living space in the current climate.
2. Population Growth
The United Kingdom is a tiny, but popular island. The population continues to grow due, in part, to immigration. While increased supply of residential real estate is to be expected because of the decline in commercial property, this will also be met with increased demand over time. Residential property in Britain has consistently been a great investment and this will continue to be the case going forward.
As the UK’s population continues to expand, those that create housing and preserve the greenbelt by converting existing buildings, will be a great asset to the nation. Under the capitalist system, those that provide value are rewarded and this case is no exception!
3. The Regulatory Environment
The government knows that commercial property is in trouble and that there is a need for new housing. We have seen a number of reforms to make it easier to change between commercial uses and to change commercial buildings to residential. It is likely the government will continue to add to these changes as and when needed. Local authorities will be concerned by the number of commercial buildings currently unoccupied and may be more amenable to this type of conversion right now.
Now is an excellent time to start given the current regulations. It is impossible to predict the attitude of any future government, so it is vital to strike while the iron is hot!
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