In the UK, the two main classifications of property for buyers and investors across the country are commercial and residential. Both property types are distinctly classified by way of building regulations, planning permission and intended uses, all of which are useful to know before investing, buying or leasing the property in question.

Any property investment can seem daunting from the outset, but the more informed an investor is as they enter the negotiations, prior to exchanging contracts and completing, he better position they will be in once they receive the keys to the property in question.

Commercial properties are those that must be used for business [commercial] purposes of various natures which can range from a run-of-the-mill office space to a laser hair removal clinic or a shop; whereas residential properties are solely intended to be a place of residence and a place of abode for the property owner or tenants who rent from the owner.

When it comes to landlords, there are some grey areas which need to be considered as a residential property may be intended for the buy-to-let market and thus, there will be a degree of crossover.

What Can Commercial Properties Be Used For?

Before identifying the precise use of a commercial property, the location of the property in question is likely to be an important factor. For example, if the premises are to be used as a high street shop, it will of course need to be situated somewhere near the high street with good foot fall.

However, if the property is to be used as an office and workplace, it may be less important how close it is to high street retailers and more important how close it is to transport hubs in the area for the inevitable employees and staff. Once the location of the business premises has been established, it needs to be confirmed what the property will be used for and thus, if it is permitted to be used in the intended manner. Common uses for commercial premises include:

  • Office spaces
  • Shops
  • Restaurants and cafés
  • Showrooms
  • Warehouses

There are some permitted uses for commercial premises which will need additional considerations. For example, if a warehouse will be storing hazardous materials or anything requiring additional safety measures, you will need to consider additional regulations and safety precautions prior to being able to commit to the space.

A shop is an intended use of commercial premises


Using Residential Properties

Residential properties will typically be used as the place of abode and residence for a person, family or multiple tenants.

Generally speaking, a residential property will come in the form of a house or apartment. In the case of apartments for residential use there are various forms to consider. These include:

  • House conversions
  • Apartment blocks
  • Maisonettes
  • Houses of Multiple Occupancy

Each of which will require different procedures to be followed when buying or letting.

Unlike commercial properties where building work and development will typically require specific planning permission and potentially liaising with the local council or authority, residential properties’ refurbishments will often fall into the remit of permitted development and will therefore not require any specific planning permissions, unless the work falls outside of the remit of such permissions.

Many homeowners will factor into their mortgage, any works they wish to carry out on the property, for example, if a loft conversion or general refurbishment and refitting is required. However, where the works are not fully covered by the mortgage, a short term loan may be taken out or a property loan specifically for the intended works may be taken.

As a landlord, if you are looking to convert a large house to a house of multiple occupancy (HMO) however, you will need to seek planning permission and will need to liaise with the local council, as the intended use of the property will be altered.

Although an HMO will still be a place of abode, albeit for multiple people, the use of the property will be altered from a single to a multiple occupancy residence.

In addition, the landlord and property owner will be responsible for ensuring the necessary and required acoustic testing, such as sound insulation testing is accounted for and carried out prior to the property being inhabited.