Editor's note: This brief was summarised by The Property AI Team from a report by PropertyWire. Read the original article for full details.
Finance Gap Hampers Commercial-to-Residential Conversions
A mismatch between permitted development rights and available finance products is creating challenges for landlords seeking to convert commercial properties into residential units, according to a report by PropertyWire.
Class MA permitted development rights allow property owners to convert certain commercial buildings to residential use without the need for a full planning application. However, the report notes that lenders' assessment criteria have not fully adapted to this category of borrower.
This situation has resulted in difficulties for landlords who wish to take advantage of the streamlined conversion process but are unable to secure suitable finance products. The gap between regulatory permissions and lender requirements is affecting the ability of some landlords to proceed with permitted development conversions.
For UK letting agents and inventory clerks, these challenges may impact the supply of new residential units entering the rental market, as well as the pace at which commercial properties are repurposed for residential use.
Source: PropertyWire