There has been a massive 63% increase in change of use applications from commercial to residential property in England between 2021 and 2023 according to Direct Line landlord insurance boss Jonny McHugh (pictured).

At the same time, planning approvals have increased 60% and the number of change-of-use applications in 2024 is on track to exceed 2023’s figure by a further 20%.

Direct Line says it is a sign landlords now consider converting empty commercial buildings into rental properties as a serious investment opportunity.

The property market is constantly evolving.”

While there is an undersupply of housing in England, the rise in remote working and the retail sector’s continued transition to online has left many commercial properties under-utilised or vacant.

Converting these spaces into residential units can provide greater revenue for landlords, long-term stability, as well as new income streams.

London is at the centre of this trend and has seen the highest rates of growth in applications over the last 2 years. Seven of the Capital’s Boroughs feature in the top ten – Haringey took the top spot, with a 100% increase, while Enfield, Merton, Croydon, Ealing, Lewisham and Hackney also make an appearance.

Future-proof investments

The data also revealed that Somerset (90 per cent increase) Wakefield (70 per cent), Bristol (68 per cent), Sheffield (58 per cent), and Milton Keynes (57 per cent), are more areas with high levels of change of use application approvals.

Jonny McHugh, Head of Direct Line Landlord Insurance (main image) says: “The property market is constantly evolving and as demand for residential property continues to soar, it has increased the attractiveness of converting commercial units for domestic use.

“By converting underused commercial properties into residential units, landlords can help maintain their revenue streams and future-proof their investments.”