Under new permitted development rights announced earlier this year, the conversion of a vast array of high street premises into residential property will be allowed without planning permission, via a fast-track prior approval.
Whereas existing permitted development rights granted a right to convert offices to residential, these new rules will also enable the easier conversion of other buildings, such as shops, restaurants, professional services, surgeries, nurseries and other high street uses. So, it opens up a whole range of new opportunities for investors who want to convert and refurbish property either to let out or sell for profit.
However, at the same time, there are also challenges. The post lockdown boom in building projects has put increased demand on builders and building materials, driving up the cost of both. This extra demand has coupled with other factors that have restricted access to labour and supplies. Brexit for example reduced production because of the pandemic, even the container ship that was trapped in the Suez Canal, have all contributed to the scarcity. A recent report by the Timber Trade Federation said that suppliers were working round the clock but struggling to keep up due to, amongst other things, forest fires in North America and Sweden recording their lowest stock level for 20 years.
The result is that, while there are more potential opportunities, the costs and logistics of completing a successful refurbishment project have become more challenging. This should be a consideration for property investors but it does not need to be an insurmountable hurdle. It can be overcome with proper planning and, in some circumstances, a smart choice when it comes to financing the project. For example, at Alternative Bridging, we have launched a refurbishment range that is available for light and heavy refurbishments on residential and commercial property, features initial advance for purchase or refinance and further drawdowns to fund improvements. There is also a final advance on Practical Completion (PC) of the works, and reduced interest rate following PC.
This approach gives investors the flexibility they need to respond to the evolving challenges of a project so that they can continue to make the most of the opportunities – and that’s the key to successful property investment.
