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Know how: Converting a commercial property into a residential one

Converting a commercial property into a residential one has the distinct advantage of the building already being there – you may save on the costs of a new build and can see exactly what you are working with.

Against that obvious attraction, however, it might be helpful to set a number of other considerations before deciding to go ahead with such a conversion:


  • on this score, you are likely to find that the government is already on your side in encouraging such changes of use as part of the National Planning Policy Framework;
  • this is part of the government’s response to increasing the supply of housing by making use of already developed – so called brown-field – sites and the reuse of empty buildings;
  • bear in mind that the change of use applies to the existing building only – if your plans involve extensions or renovations of shop fronts, for example, these become subject to the normal rules on planning consent;


  • of course, you may need to be prepared to wait for your planning application to be approved;


  • with planning permission in hand, you may also want to consider renovation insurance – to safeguard the property during the course of the building works as well as fulfil any obligations to have adequate buildings cover under the terms of your mortgage agreement;
  • this is something that we at GSI Insurance will be more than happy to help with;


  • commercial property may not always be in the best location for residential purposes;
  • on the one hand, it might be situated away from the kind of amenities which are generally a feature of residential neighbourhoods – such as shops, schools and the like;
  • on the other hand, it might be located in the centre of a town, where there are plenty of amenities, yet difficulties in gaining permanent access and parking;
  • there may also be noise issues from other existing businesses;

Costs of conversion

  • although it might appear immediately obvious that savings may be made by purchasing a building that already exists rather than starting from scratch, the cost of converting a commercial property may still be considerable;
  • this is especially likely to be the case when the commercial building requires significant structural alteration in order to be put to residential use.

There may be considerable attractions in choosing to convert an existing commercial building into residential use and government policy is designed to make any such decision somewhat easier.

Nevertheless, these advantages may need to be weighed carefully against potential difficulties posed by the location and type of construction of a property previously used for commercial purposes.

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