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Is Retail-to-Resi the next property investment opportunity?

The government has launched an unexpected consultation which may indirectly highlight a new opportunity for landlords and other investors - converting retail units to residential.

The Ministry of Housing Communities and Local Government is consulting on whether a shake up of the general permitted development order could see Class E be allowed to change use to residential.

Class E is itself new and currently covers a broad range of uses including retail, cafes and restaurants; financial and professional services; indoor sport and recreation; medical or health services (to visiting members of the public); crèche, day nursery and day centres, offices, research and development and light industrial.


If this change to permitted development comes into effect, it would significantly broaden the scope of the existing residential conversion rights - as it would not only apply to offices, light industrial and retail, but also to restaurants, gyms, medical facilities and crèches.

The MHCLG suggestion - and at this stage it is not policy - is that this development right could apply everywhere except Areas of Outstanding Natural Beauty, the Broads, National Parks, certain areas specific to the Wildlife and Countryside Act 1981, and World Heritage Sites.

And the usual exclusions for listed buildings, sites of special scientific interest; scheduled monuments; safety hazard areas; military explosives storage areas and sites subject to an agricultural tenancy would continue to apply.

Nicola Gooch, a planning partner at Irwin Mitchell, says this is a radical proposal. 

This is “not least because, despite the entire justification for it being related to high streets, the rights are not limited to high street properties. They will, in fact, apply to every GP's surgery, retail park, business park, gym, crèche, nursery or light industrial unit in England that existed and was in use on  September 1 2020.”

She continues: “There is a nod to preserving high streets in conservation areas, but it does seem to be just that - a nod. The intention is to include specific prior approval criteria allowing councils to consider the ‘impact of the loss of the ground floor use to residential’ in conservation areas.”



Relatively few elements of a conversion would require planning approval and Gooch describes the paperwork required to go ahead with such a conversion - if the idea becomes policy - would be “light touch”.

She adds; “Given the impact that Covid 19, and the associated restrictions, have had on the economy, there will be a real temptation for commercial landlords to flip vacant units to residential before looking at other, more traditional, commercial uses for them. If this is enacted, unless Councils are very quick off the mark with their Article 4 Directions, the future of many high streets may very quickly become predominantly residential...”


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  • George Dawes

    The traditional High Street is dead , the plandemic and the internet have done that

    Ridiculous business rates and high pice parking don't help

    Great Idea !!

  • icon

    Conversion of shops to residential has been going on for a long time, I'm down to just 2 commercial properties now the rest have all been converted to residential, the high street was all but dead before covid, this has just killed it off for good now.

  • icon

    Be careful! Shops can be run in almost any dump of a building if the customers are there. You can not (legally) do that with residential.


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