There has been a marked increase on retail to residential conversions, with 303 retail properties approved in the final three quarters of 2014.
This is the finding of commercial law firm EMW, which found that as demand for traditional retail units has been hit hard by the rise of online shopping, landlords are opting to sell or let retail properties for residential conversion for profit.
The change of use process was made significantly easier in 2013 by the introduction of permitted development rights, under which more changes of use can avoid the need for planning permission.
Of the 303 retail properties approved for conversion in the final nine months of 2014, 151 did not require a formal planning application.
In some cases landlords are even evicting retailers in order to convert properties for residential use.
The local authorities that saw the greatest number of retail to resi conversions have also seen rapid growth in the capital value of residential property in those areas in recent years.
Among the 10 areas with the most conversions are the London boroughs of Islington, N1, Southwark, SE5, and Merton, SW19.
Elmbridge in Surrey, which is the highest income area in the UK outside London, has also seen an increase on conversions.
Giles Ferin, principal and head of planning at EMW, said: “The high capital value of residential properties, combined with the decline of the high street, has created a situation where a flat can be a better investment than a retail unit.”
“The structural shortage of new homes is only going to make this type of conversion more attractive for retail property owners. Bricks-and-mortar retail has come under a lot of pressure from e-commerce, and retail properties in second- and third-tier locations are often less profitable now than they once were.”
