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How bridging loans help convert commercial properties into flats
Converting a commercial property into a residential unit has become increasingly popular in recent years. As the demand for housing continues to rise, more property investors are turning to commercial units as opportunities in a world where bricks-and-mortar retail is declining.
Office buildings, shops, and warehouse units are prime locations for creating houses, apartments, and student accommodation, especially as they’re often located within areas that are in high demand for housing.
However, the challenge many investors face is that these properties often require a large amount of capital, and rarely fit in the timescales set by traditional mortgage lenders. This is where a bridging loan can be the difference between starting and losing these opportunities.
How bridging loans support converting commercial units to residential
Bridging loans are well-suited to converting commercial units into homes as they allow the time needed to purchase, make refurbishments, and prepare for the next stage.
As many commercial units aren’t built to be habitable, there is a lot of extensive structural and compliance renovations that need to take place, as well as layout changes to make the building suitable for residential living.
These plans are often complex and require a lot of careful planning and time. This is where bridging loans come into their own, as they allow you to fully plan and execute your plans with ease, removing the added pressure you’d typically find when sourcing other capital, such as traditional lending.
Navigating planning and regulation
When planning to convert a commercial unit into housing, you also need to consider the regulatory environment, which includes planning permission, development rights, and all essential building regulations set out by the UK Government, as these all influence how and when a commercial unit can be converted.
Most traditional lenders see these as risks and can be more reluctant to release funds until all approvals are in place. Whereas bridging loans offer more flexibility and can help you secure the property while you finalise planning permission and navigate the regulatory requirements needed.
Exit strategies after conversion
An exit strategy when obtaining a bridging loan for conversions is key. Whether your goal is to sell the converted units and release the increased equity or to rent the units to tenants, an exit strategy can help us understand your project’s timeline. This will allow you time to market the property effectively and secure longer-term finance. Having a fully formed exit strategy can ensure your conversion delivers the maximum return on investment.
Why choose KSEYE
At KSEYE, we understand the stress and complexity that comes from converting a commercial unit into residential dwellings, and we have extensive experience in financing commercial-to-residential conversions. This is why our bridging loans are designed to help you with speed and flexibility, so you can focus on growing value and achieving the returns your project deserves.