Commercial Property Change of Use

Commercial Property Change of Use

Buying a commercial property or a Public House with a view to change of use can be challenging. We don’t believe that any local communities welcome the closure of Pubs, many purchase the pub as a Community Asset.

Buying a commercial property for change of use to residential it can often be a risk worth taking. However, it is worth doing some research or getting some professional advice so that the risk can be reduced. Most commercial premises such as industrial or retail do not fit the space criteria to make good homes. More recently offices have been converted into apartments or flats in city or town centres.

Buying a public house with a view to change of use can be more challenging. The hospitality sector is currently facing increases in costs and a lack of employable staff therefore many are struggling and have become a target for developers.

The National Planning Policy Framework 2012

last updated in July 2021, states that planning decisions relating to the loss of public houses should “guard against the unnecessary loss of valued facilities and services, particularly where this would reduce the community’s ability to meet its day-today needs. ”There will be additional guidance with the appropriate District Council Planning Policy which will be centred around retaining community facilities.

Public houses and change of use

Developers will have to take the following steps when applying for change of use

  •  Prove that the Public House no longer serves a purpose within the local community
  •  Put the Public House on the market for sale as a going concern for a reasonable period, to see whether any operators are interested in running the pub
  • The asking price must be considered to be reasonable in the current market

With the number of Pubs that have permanently closed their doors over the last 20 years there is good reason for the change of use criteria to remain challenging. We don’t believe that any local communities welcome the closure of Pubs. There are many that come together and purchase the pub as a Community Asset, to avoid permanent closure.

Public houses and viability studies

There are cases where pubs are no longer viable. This is because the pub trade has changed considerably over the past 20 years. Consumers behaviour has changed, pubs need to be adaptable to provide a wide choice of products including food, entertainment, letting bedrooms and function spaces. Recent cost increases have also had an effect on profitability which makes some pubs unviable certainly for the short term.

In most cases it will be the inability of the business to adapt due to the physical restraints within the fabric of the building or site. This in turn will have the biggest impact on whether the business can compete in the surrounding area.

Before you purchase a public house with a view to change use, we recommend getting an independent viability study. This should be completed by an expert in the field of valuing public houses. This will save money and time as the planning authorities will need one in order to proceed. It is essential that this is done by a suitably qualified surveyor as they are often challenged during the planning process.

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