Many are coming from experienced developers with a strong track record in ground-up development who are now looking at existing buildings through a different commercial lens.

Not many developers wake up one morning and decide they only want to convert buildings. Ground-up development has and always will be a core part of the market. But what has changed is how some developers assess opportunity. Rather than asking which project offers the biggest return, many are now asking which one offers the clearest route to delivery.

Planning uncertainty

Planning has become another important consideration. Many developers are looking for greater certainty over the route to approval before they commit time and capital.

That’s one reason certain conversion projects have become more attractive. Where schemes fall within permitted development rights, such as some Class E commercial space being converted to residential under Class MA, the prior approval process is generally more defined than a full planning application. Approval is still required from the local planning authority, but, unlike planning permission, prior approval applications are assessed against a prescribed set of conditions and are typically determined within a 56-day window.

Government figures also show that only around one in five prior approval applications have been refused over the past 14 years. Approval clearly isn’t guaranteed, but with many developers facing planning uncertainty, it’s understandable that this clearer route to delivery is an attractive proposition.

Reducing, not removing risk

Every development carries risk. Construction, planning, funding and sales have always been part of the equation. The objective isn’t to remove those risks, because that’s simply not possible, but instead to understand them properly and build a scheme around realistic assumptions.

That’s one of the reasons conversion projects are attracting attention. You’re starting with an existing building, so there’s often a clearer understanding of the asset, its constraints and the work required to deliver the desired outcome. That doesn’t make the project easier or remove the risk, but it can give developers a firmer basis on which to assess the opportunity before committing capital.

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Government housing supply figures show that almost 7,700 homes were delivered through change-of-use Permitted Development Rights in England during 2024-25, the majority through office-to-residential conversions.

That demonstrates the scale of the opportunity, but it doesn’t mean every conversion benefits from a simplified planning route. Many projects still require full planning permission. Pubs, with their Sui Generis use class, are one obvious example where residential conversion remains a planning-led exercise.

Even so, experienced developers will often tell you they have a better understanding of the planning route than they might with a completely new scheme, helping them make more informed commercial decisions before work begins.

Attracting experienced developers

It’s also notable how many of these enquiries are coming from experienced developers. It would be easy to assume they’re from new developers, attracted to conversions because they’re perceived to be an easier option. That’s a mistaken assumption, given conversion projects can be highly complex in their own right.

In reality, many of the enquiries we receive come from experienced operators who have delivered sizeable schemes before and have simply concluded that, in the right circumstances, existing buildings can provide greater visibility over the challenges they’ll need to overcome.

From a lender’s perspective, that’s where the conversation really starts. Every development carries uncertainty, whether it’s a conversion or a ground-up scheme.

The important question is whether those risks have been identified, challenged and properly reflected in the commercial case before funding is agreed. Has the professional team been carefully considered? Have build costs allowed for contingencies and professional fees? Has the exit been genuinely stress-tested? Those fundamentals haven’t changed because they’re what underpin successful developments, regardless of the asset.

I don’t believe developers are turning their backs on ground-up development. They’re simply becoming more selective about where they deploy capital.

The objective isn’t to avoid risk altogether, but to choose projects where that risk can be understood, managed and priced appropriately. That’s why conversion projects are featuring in far more conversations than they were even a few years ago.