Can repurposing commercial properties solve the UK housing crisis?

As the demand for housing continues to outpace the supply, addressing the crisis has become an urgent and complex task that requires innovative solutions and efforts from policymakers, developers, and communities alike.

With soaring property prices, a shortage of affordable housing, and rising interest rates and rental costs, the housing crisis has left countless individuals and families struggling to secure suitable and stable accommodation. This situation has also given rise to a host of challenges, including homelessness, overcrowding, and a widening wealth gap.

The All-Party Parliamentary Groups (APPGs) for Ending Homelessness and Housing Market and Housing Delivery have released the report titled Rethinking Commercial to Residential Conversions. This publication explores the idea of repurposing underutilised commercial properties into residential homes as a potential immediate solution to the crisis.

By examining the viability, challenges and benefits of such conversions, the report aims to offer new perspectives and strategies for addressing the pressing housing challenges in England.

Rethinking Commercial to Residential Conversions: Key findings and recommendations:

  • Commercial to residential conversions can play a vital role in expanding the housing supply
    The report highlights that commercial to residential conversions have the potential to make a substantial impact on increasing the housing supply. In England, an estimated 145,000 genuinely affordable homes are needed annually to combat homelessness, with 90,000 of them designated for social rent. Notably, vacant local authority buildings alone present an opportunity for the creation of approximately 20,000 new residential units through commercial to residential conversions. This underlines the significant contribution that such conversions can make in addressing the pressing need for affordable housing in the country.
  • Government should take immediate action to ensure the availability of affordable housing
    Immediate action by the government is crucial to ensure the accessibility of affordable housing. An essential step in this direction is to priorities the proposal by Vicky Ford MP in the Ten-Minute Rule Bill. The bill suggests empowering local authorities with the ability to mandate affordable housing contributions from conversion projects. Adopting this approach can accelerate the provision of affordable housing and secure a greater number of affordable homes in the near future. This proactive approach would significantly contribute to alleviating the housing crisis.
  • Introduce funding methods to incentivise conversions
    The APPGs advocate for the creation of a dedicated funding pool to facilitate the transformation of vacant commercial properties into residential spaces, with a focus on supporting not-for-profit and community-led organisations. This funding pot would serve as a strong incentive for the adoption of high-quality and collaborative strategies, while also supporting the implementation of pilot projects.

However:

  • Standards need to be strengthened to ensure conversion properties are of a high quality
    The report raises concerns about the substandard quality of conversions, which has been facilitated by Permitted Development rules (PDR), which allow modifications to properties without the requirement of full planning permission. It states that due to the implementation of PDR, numerous past conversions have fallen short of meeting the essential standards for comfortable and safe living conditions. Highlighting this issue, the report stresses the urgent need to strengthen regulations and elevate standards to ensure that conversion properties adhere to stringent criteria, promoting the provision of high-quality, habitable, and secure homes.
  • Local authorities also need to have greater input over where the conversions take place
    Granting local authorities greater influence in the decision-making process regarding the locations of conversions is crucial. Local authorities will take into consideration factors such as housing demand, existing infrastructure, and the potential impact on the local community, and thus ensure that conversions contribute to the holistic development and revitalization of their respective areas. This involvement will enable more informed and context-specific choices that will align with the overall goals of local communities and promote sustainable growth and regeneration.
  • Individual councils should have the ability to set affordable housing requirements to meet local need
    Recognising the regional variations and unique challenges in housing needs faced by local communities, it’s important to grant individual councils the authority to establish affordable housing requirements that align with local demand. This approach acknowledges that a one-size-fits-all solution may not effectively address the diverse housing challenges across different regions. By allowing councils to consider factors such as local income levels, housing market conditions, and population demographics, they can tailor affordable housing mandates to suit the specific needs of their communities, ensuring a more targeted and effective response to the pressing housing issues faced by individuals and families in different areas.

In conclusion, the report provides valuable perspectives on the complexities and possibilities of converting commercial properties into residential units. It also serves as a valuable resource for local authorities, policymakers, developers, investors, and communities striving to address the housing crisis through innovative solutions to meet the growing demand for residential accommodations.

Read the full report here