This year is likely to see an increase in the regeneration of historic buildings into new residential opportunities, as opposed to constructing from scratch, a property expert has predicted.

Charles Warrack, partner at property consultancy Fisher German, is seeing the commercial and buy-to-let residential market shift towards a preference to work with what is already on a site, rather than looking to build brand-new.

This, he says, is partly down to regenerated buildings having a reduced carbon footprint, as well as the generally quicker turnaround of completing the sale.

Warrack is also seeing buyers pay an increased premium for sites with change-of-use planning permission already in place, or permission to build further units on existing land, as fewer buyers are willing to try and seek permission themselves with backlogs in the planning system slowing progress.

With interest rates predicted to stabilise in 2024, Charles believes that demand will increase and that sites with permissions will attract even more attention.

He said: “While regenerated buildings and sites with consent for changes have always been more desirable, we are seeing this demand increase as 2024 begins and we think it will only increase further when borrowing costs come down.

“In the past, conditional offers subject to gaining permission may have been suitable for particular sites, but now it is almost always worth it to get that change-of-use permission first. The time and money needed to secure consent is almost always paid back from the sale.”

According to Fisher German, this trend has been highlighted by recent market opportunities in the Midlands, including the sale of a retail unit in Walsall with permission for the top two floors to be converted into 13 residential apartments, and a children’s play centre in Cradley with permission to have two flats on the first floor.

Warrack added: “Sites like this, where historic buildings can be converted and new buildings created, offer the best of both worlds to buyers assuming consent has been secured.

“ESG is becoming increasingly more important for buyers, so buildings which can be renovated to a high specification are seeing significantly more interest. It is often more energy-efficient to work with what you have rather than building it from the ground up.

“However, the scope to also build on-site alongside a conversion gives a buyer a chance of additional income after they have finished their renovation on the existing building. When borrowing and the cost of materials improve, we expect demand for these kinds of opportunities to rise significantly.”