7 things you should know before you buy a commercial property for residential conversion
By Simon Taylor FRICS
Is the property liable for VAT? Many commercial properties have VAT attached which is now 20% - extra money you will have to find because as a private individual you cannot reclaim this.
Please, please, please arrange a full structural or building survey. This will tell you what’s wrong (or right) with the property and will give you an ability to renegotiate the price when your surveyor lists the problems with the building.
Listed building/conservation area. Check this as your ability to change the property to the way you want it may be severely limited if it is!
Commercial rates. In order to avoid these, as they can be a substantial outgoing, you can apply to have the property de-listed but this will only be achieved on the basis of having obtained planning consent for residential use.
Contamination. Deleterious and dangerous materials as they are called in my world but to you it means things like - asbestos, high anumi cement or oil/chemical contamination. Obviously these need to be removed not only for your health but so you can obtain a residential mortgage.
Finance. Residential lenders generally, will not lend on commercial property without you first having residential planning consent
Properties to avoid. Banks and public houses are notoriously expensive to convert. Plus, to convert a pub to a residential property it needs to be de-licenced – and if one previous customer objects to your application you may find yourself running a pub not owning a house.