香蕉福利直播

Guest Blog: Will Covid 19 lead to more offices being converted into flats?

Guest blog by Steve Hardwick, Technical Director, Gateway Surveyors

Guest blog by Steve Hardwick, Technical Director, Gateway Surveyors

Since 2013, a significant number of offices (including mine!) have been converted into flats under permitted development rights (PDR).  Over the last year, of course, most of us have had no choice but to move from working in an office to working from home. In many cases though, even after the pandemic is over, this will continue even if only on a part-time basis. What then will happen to those buildings that no longer remain viable as offices? Some will undoubtedly be converted to other uses, including residential.

Some office to residential developments have worked really well, where the office building was already of more residential appearance (for example brick walls/tiled roof) and/or in an area where there was established residential use with decent access to shops, schools, and other amenities. Other conversions have worked less well, both in terms of location and appearance, and the units have ended up as predominantly buy-to-let/renter propositions, as serviced flats, or even as aparthotels. The appetite for lending on these conversions has diminished quite markedly over the last year. Something that may have been acceptable for residential mortgage in say 2018 is no longer acceptable. With that, of course, comes increased risk and concern about future re-sale and value.

What should lenders be wary of?

  • Light Industrial/Retail/Business Parks, or where commercial/retail/business use predominates.
  • Limited access to shops/schools/transport and other amenities.
  • Adjoining uses detrimental to ‘quiet enjoyment’ of a residential property.
  • Demand disproportionately in favour of BTL/investment as opposed to owner occupation
  • Unacceptable construction in relation to broader lender criteria
  • Elements of construction not having a 60 year+ durability
  • Combustible cladding/deleterious materials
  • EPC rating not within A to E
  • No warranty
  • No external space (balcony/terrace/garden)
  • The building still looks like an office!

City centre conversions are especially difficult to assess now. They may meet current lender criteria but, moving forwards, will buyers be looking to live in city centre locations with easy access to an office that may no longer exist?

Farther out in some of the town centre ‘close to station’ locations, is having a 45-minute train connection to London going to be as important as it was little more than a year ago?  A lot of buyers, aware that they can (and will be allowed) to work from home in future are looking further afield where they can buy a house with larger outside space and more rooms. In addition, will the units currently set aside for planned use as town and city centre restaurants, shops, and bars be fully occupied if adjoining offices are vacant?

Lifestyle changes and changes of personal and family priorities as a result of Covid19 will, I believe, have long term implications and I think it is reasonable to assume that city and town centre flats, whether newly built or newly converted, will not maintain the same levels of demand and value as we progress through the 2020’s.

 

The views, opinions and positions expressed within guest blogs are those of the authors and do not necessarily represent those of the 香蕉福利直播.

You may also be interested in...

香蕉福利直播 Card
  • 香蕉福利直播.Event Event
  • Prudential Regulation

Risk appetite training for credit unions

With increasing regulatory focus on the safety and soundness of Credit Unions, it is crucial that you understand the regulator’s risk appetite expecta...

香蕉福利直播 Card
  • 香蕉福利直播.Newsbite_1 Society Matters
  • Thought leadership

The future is mutual if we want it to be

Featuring many of the brilliant speakers from the Building Societies Conference, with plenty to inspire, challenge, and empower.

香蕉福利直播 Card
  • 香蕉福利直播.Event Event
  • Prudential Regulation

Treasury management training for credit unions

The objective of the course is to introduce participants to the role of Treasury, providing an introduction to financial markets, yield curves and how...

香蕉福利直播 Card
  • 香蕉福利直播.Event Event
  • Audit & Taxation

Risk, regulatory, audit and accounting seminar

After a successful in-person event in 2024, and responding to delegate feedback, this year's annual update will once again take place in Birmingham. ...

香蕉福利直播 Card
  • 香蕉福利直播.PressRelease Press Release
  • Prudential Regulation

香蕉福利直播 responds to Bank of England announcements

Responding to today's announcement from the Bank of England, Ruth Doubleday, Head of Prudential Regulation at the 香蕉福利直播 said: "The 香蕉福利直播 welcomes the c...

香蕉福利直播 Card
  • 香蕉福利直播.Event Event
  • Thought leadership

Navigating Uncertainty: Omnichannel Customer Communications That Build Trust in Financial Services

A free webinar hosted by 香蕉福利直播 Associate, Quadient We’re excited to invite you to our upcoming thought leadership webinar: "Navigating Uncertaint...

香蕉福利直播 Card
  • 香蕉福利直播.PressRelease Press Release
  • Savings

Open letter to the Chancellor to save Cash ISAs

Open letter to the Chancellor highlighting the importance of retaining the Cash ISA limit

香蕉福利直播 Card
  • 香蕉福利直播.PressRelease Press Release
  • Savings

香蕉福利直播 comments on the news that reform of Cash ISAs on hold

The 香蕉福利直播 welcomes the announcement