No room for new homes? Think again. Plenty of empty commercial space is crying out to be reborn as social housing. Josephine Smit reports on two successful conversion projects
"Space for new building in London is at a premium, so refurbishment projects are becoming much more common," says John Stuart, development manager at Metropolitan Home Ownership. The trend isn't limited to the capital. All over the country, as options for development in urban areas become increasingly limited, housing associations are choosing to – or being forced to – carry out work to convert non-residential disused buildings into social housing.

Maximising space in the capital
MHO, part of Metropolitan Housing Trust Group, has taken on a variety of projects to develop homes both for rent and for low-cost home ownership, including the Victorian Highcross School, in Tottenham, north London, sold by Haringey council for just £1 because of its derelict condition.

Union Point, in Tottenham, north London, is one of MHO's latest projects. It's a scheme of 26 apartments created in the upper-storey offices and storerooms of a 1930s shop. MHO bought the top two floors of the building from retailer Allied Carpets, and then applied for – and got – planning permission to up the density and maximise the value of the site by adding another floor to the building.

The prominent street-corner building was in a shabby state when MHO bought it but the housing association's detailed survey showed that the building itself was fundamentally sound, even though its exterior was in need of redecoration and repair. The refurbishment was carried out by contractor Durkan under an open-book partnering agreement. "Our open-book contract with the builders set out agreed profits and allowed us to see all costs and submissions from subcontractors," says Stuart. "As a result, there were no major surprises."

The exterior was cleaned, repaired and repainted and the windows replaced with new double-glazed coated-aluminium units. Two stairways give access to the apartments, the main stairway using the existing circulation, and the second running inside the building to first floor level and then externally up to the building's rooftop decking area. The building's original structural steel frame was strengthened and extended upwards to create the extra floor, and the new roof topped with an eco-friendly, single-ply rubber membrane made from recycled car tyres. The building's thermal and sound insulation were also upgraded, with particular attention given to limiting sound transmission between the retail space and the first-floor homes.

The homes have been made available on minimum 50% equity shares, starting at £47,500 for a one-bedroom apartment. Combined mortgage/rent payments, including service and management charges, amount to £461 a month.

Our open-book partnering agreement with the builders set out agreed profits and meant there were no major urprises 

John Stuart, MHO

Refurbishment is not, however, without its problems. "Refurbishment projects are less predictable than building from scratch," says Stuart. "We manage the risk by making sure we know what we're taking on and then closely monitoring costs.

"When selecting a building for refurbishment we look at the technical aspects so we can calculate the costs and timescales involved; these range from the structural soundness and state of repair to things like whether we can use existing internal partitions."

MHO also takes into account the expectations of the potential occupants, including such factors as access to shops, schools and public transport. "Providing parking and communal open spaces can be especially challenging when we are working within the confines of existing buildings," Stuart continues. "At Union Point, for instance, we built an open, decked area on the rooftop for residents' use."

Converting a shop in Northumberland
Until earlier this year, Northumberland housing association Tynedale Housing devoted its refurbishment activity to bringing bought-back right-to-buy properties up to standard. But the creation of a new area office in the centre of the former mining town of Haltwhistle presented the opportunity to create homes to rent over its own "shop".

The association, created almost three years ago through the transfer of Tynedale council's 3500 homes, bought a two-storey shop, built in the 1960s, with a two-bedroom apartment above. It refurbished and converted the Thirlwell Place premises to provide its office facilities on the ground floor, with a one-bedroom apartment alongside and two one-bedroom apartments on the first floor.

The building had been a shop, a coffee shop and a ladies’ hairdresser 

Ian Darling, Tynesdale Housing

The housing association recognised that it was taking on a larger-scale refurbishment project than it was used to, so it calculated its risks carefully. "We took the project through a risk appraisal process and did research to see how we could convert the building," says Ian Darling, Tynesdale's chief executive.

"It had been a shop, a coffee shop, and a ladies' hairdresser. We had to get planning approval for change of use," says Darling.

The building itself was in good condition, so the refurbishment works were confined to adding PVCu double-glazed windows, bathrooms, kitchens, and central heating. The building had to be remodelled internally and a small extension was added to the rear to provide separate access to the apartments.

The project was completed, on budget, in the summer. "We controlled our costs. There wasn't anything we came across on site that we couldn't handle," says Darling.

Union Point

  • Before: three-storey store originally built for the London Cooperative Society in 1930 but most recently owned by Allied Carpets
  • After: Allied Carpets continues to own the ground floor; above are 26 one- and two-bedroom apartments
  • Cost (including acquisition of the site): approximately £2.8m
  • Grant input: £624,000 social housing grant; £624,000 recycled capital grant fund
  • Project team: Contractor Durkan, architect Stock Woolstencroft and employer’s agent BPM
  • Thirwell House

  • Before: a two-storey, town-centre building with retail space on the ground floor and a single apartment above
  • After: regional office and meeting rooms plus one one-bedroom apartment on the ground floor, two one-bedroom apartments above
  • Cost (including acquisition of the site): £270,000 total for the building, with £183,000 for the apartments
  • Grant input: £119,000 local authority social housing grant
  • Project team: contractor E Scarth & Son, property adviser Sanderson, Townend & Gilbert; Tynedale Housing’s in-house architect
  • Home truths

    The housing sector is squandering enough brownfield land to build 130,000 homes, according to the government’s National Land Use Database. It has identified 2500 ha of old buildings suitable for residential development across the UK. One good incentive for registered social landlords to convert these into homes is that an RSL converting non-residential buildings into residential pays no VAT because the government is so keen to encourage this type of conversion. Social landlords must get proof from the planning department of the local authority that the building has been used for non-residential purposes, such as a pub, shop, office, church, school, hospital or even prison. Private developers have long been aware of the advantages of turning these sorts of discarded buildings into trendy loft-style apartments, but affordable housing providers have been slow to exploit the benefits of conversion and re-use. On the other hand, refurbishment is often problematic for many housing associations. “Network Housing Association tends not to develop existing buildings because the process is opportunities-driven and financially led,” says Paula Fance, Network’s development director. “Office sites have a very high value on the open market and are likely to be acquired by private developers. As we are very much reliant on grants and other sources of funding, we are more likely to seek brownfield sites where there’s scope for mixed tenure and mixed use.” A report issued by the Office of the Deputy Prime Minister in March, Developing Additional Housing Above and On Non-residential Sites, acknowledges the difficulties: “Already, schemes are beginning to come forward in inner urban areas where land values are making such redevelopment commercially viable. However, exploiting this potential more broadly may not be easy and depends on innovation and creativity by a wide range of interested parties. Local authorities may also need support to promote the early applications that will be so crucial in establishing trends and precedents.”