Rural Property Investment: Converting Agricultural Buildings & Stables To Residential

During the COVID-19 pandemic, the high street was fundamentally transformed by lockdown restrictions and space limitations. Hospitality and retail venues were hit the hardest, with many closing down entirely. This led to a new class ‘MA’ ruling under permitted development which allows developers to convert buildings into C3 residential property if they meet certain requirements. The move is intended to help ‘build back better’ - but it doesn’t account for the opposite side of COVID disruptions: a rapid rise of interest around the British countryside and country homes away from city life.

Rural property boom

As lockdown restrictions fluctuated around the country and international travel ground to a near-halt, many British holidaymakers chose to see more of our own nation. This led to a huge ‘staycation’ boom - but it also increased interest in living in rural locations. 

This interest, coupled with a more flexible working model that meant workers could be located anywhere, has made rural property a hot topic.  The BBC reported that Cornwall has overtaken London as the most searched-for area on property site Rightmove. The same report also said that while sales slowed across the country during the pandemic, sales lifted faster in rural areas than anywhere else. 

The same data shows promising signs for the rental market for those who can address the shifting needs of tenants. In 2021, data showed that renters were increasingly searching for two-bed homes and bungalows as opposed to flats. 

The Guardian also showed that rural house prices were rising far faster than in urban areas, growing at a rate of 14.2% compared to 7%. The affordability of homes means that the rental market can remain a viable alternative for people who want to live in the countryside but may not be able to purchase a house at these increasingly high costs. This creates an appealing potential for you as an investor. 

Conversions as an opportunity

For property entrepreneurs who can purchase disused agricultural buildings, or those who already own them, the opportunities are clear: conversion property turned into homes and flats can help attract a new generation of tenants that are looking to escape city living. However, with that escape comes an expectation around property type: with more tenants desiring two-bed houses over flats. 

Luckily, agricultural buildings are often large enough to accommodate more spacious residential buildings than that of city centre property. When every square metre comes at a premium, city centre conversions often focus on packing as many rental opportunities as possible into a disused office block. While this can be lucrative, it isn’t a good strategy for those converting agricultural buildings. 

The reality of countryside living is that both buyers and tenants expect a larger home for their money. In some cases, you can deliver a conversion that matches expectations without needing planning permission…

Permitted development changes

In our full guide to permitted development rights, we outline the things you need to know about how changes to Use Class have made it possible for developers to transform retail, office and hospitality units from disused buildings into residential property without requiring planning consent from the planning authority.

However, many of the regulations focus on high street property - part of the Government’s build back better campaign. Most of the Use Class changes are around restaurants, shops, entertainment venues etc which have fallen out of use during COVID and can therefore be made new through conversion into ever-in-demand residential property. 

However, one of the many Use Classes that fall into permitted development rights are Agricultural Buildings (Sui Generis) converted into Class C3 residential property. This gives property owners in rural areas some exciting opportunities. 

Rural outbuilding to home conversions

The first step of any conversion under the new permitted development rights is to ensure it meets key expectations. These are mainly stipulations around size, natural light and insulation. You’ll also need to check if the building actually applies for permitted development. Listed buildings do not qualify - nor do any outbuildings in areas of outstanding natural beauty (AONBs), National Parks, The Broads or other conservation areas. 

Permitted development’s size limits stipulate up to 465m2 of floor space and a maximum of five dwellings to be converted from an outbuilding. Of course, you can still convert larger structures but you’ll need to seek official planning permission via a traditional planning application.  

If you’re wondering if your rural outbuilding to home conversion will meet expectations and be permitted under PD, you’ll need to seek prior approval. 

Stable block to residential conversions

Stables are some of the best candidates for property conversions due to their size. Few stables utilise all of their available space, often leaving areas that are ripe for conversion. Traditional barn buildings are typically aesthetically pleasing from the outside too, which helps make them appealing to tenants once converted.

They are a lucrative opportunity and one that already has the structural elements of the original building in place, making it easier to build a residential dwelling there than upon a fresh patch of land. In addition, data shows that barn conversion prices are soaring across the UK. 

To get started, once you have prior approval (which takes around 8 weeks), you should calculate a cost based on a list of the things you’ll need to create a habitable building from your stable block - including:

• Electrical outlets such as sockets, wiring etc
• Telephone/broadband cabling to provide internet access
• Running water
• Natural light
• Meets minimum liveable space expectations
• Heating and insulation. Consider factors such as insulating concrete floors to create thermal comfort, insulating walls, floors and ceilings and even creating internal wall partitions. 

You’ll also need to apply for prior approval for your converted barn, as we mentioned earlier. During this process, the local authority and planning officers will assess your conversion against the following: 

• transport
• noise impact
• contamination risks 
• flood risk
• Whether the location or siting of the building makes it otherwise impractical or undesirable for the building to change from agricultural use to residential use.’

Finally, your barn conversion should meet all of the following criteria to fall under PD: 

• The barn must have been used in agriculture within 10 years of your application to convert it. You cannot build a barn to be converted, it must have been in agricultural use for 10 years. 
• Your barn cannot be a listed building or you will need listed building consent. 
• It must be structurally sound
• The conversion should respect its original structure - so it should be clear the previous building was a barn (don’t overdesign it with new features).
• It can’t be in any of the areas we previously mentioned (AONBs, National Parks etc)

Due to the isolated nature of many rural buildings, you should also check for any protected species which may be sheltering in your stable/barn - if there are any present, you’ll need to have a survey done to determine their number and how easy they will be to relocate.

Finally, check for chemical spillage from the likes of a diesel generator as some chemical contamination would require an investigation before permission is granted. 

When you convert the stable, remember that you’ll likely need to create new structural openings to create windows and doors. Take a look at any other nearby barn conversion projects to see what the standard of accommodation is like - because ultimately you want to minimise the cost of your conversion whilst assuring you still attract tenants. 

Stable to residential conversion building regulations

One final aspect to consider is that your disused barn needs to meet Building Regulation requirements, which are separate to planning authority concerns. Your conversion plans must therefore be assessed by a talented architect or structural engineer. When submitting a Building Regulations Application, you can either submit a Building notice or a Full Plans Building Control application - though the Full Plans Building Control method is preferable as it offers more protection and reassurance. 

How to finance a barn conversion

While stable conversions may seem like a fairly challenging project, there are architects across the UK who specialise in rural work. For landlords looking to maximise their investments, it’s hard to argue with the benefits of stable conversions: 

• The soaring market for rural properties
• Converts an existing disused space
• Avoids the need for planning permission
• Can create multiple homes from one building (limits apply)

The cost of your barn conversion may initially be significant, but the long-term rental returns can be extremely rewarding for property entrepreneurs. Some landlords may be able to seek VAT refunds for work carried out on disused barn conversions. Take advantage of the surging interest in rural properties today and let Rangewell help advise you on funding and finance for your stable conversion project.