It has been reported that the demand for Barns and other redundant agricultural and industrial buildings to convert into residential accommodation is now significantly in decline.
The total number of agricultural properties being converted into homes has fallen by over a quarter with 413 earlier this year, compared to 563 for the same period last year, according to Saving Stream, a funding company.
It appears that the greater reticence in the market has had a disproportionate affect on such properties. Not all conversions exceed projected budgets and costs, but a significant proportion do. However, with the asset value increasing throughout the time of development, perhaps by as much as 10% over a typical two year period, then the financial cushion usually protects the over exuberant developer.
The squeeze on credit and property funding as well as the slower drag of any reduction in asking prices also play their part. The supply of suitable buildings is also affected, as the ‘easier’ conversions have in the main already been developed so the stock of properties available to convert becomes more restricted.
It is also not without foundation that the horror moments from the Grand Designs TV programme and other similar television programmes will put off potential developers. Other factors include the overall market dampeners such as the increase in Stamp Duty on second homes – undoubtedly a factor.
A spokesman for London and Country Mortgages said “Anyone seeking the Grand Designs lifestyle might find that funding is is harder than expected. A lot of these conversions are easier said than done. Agricultural land might have restrictions on it which can add complications.”