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A full development appraisal — acquisition, planning, conversion, holding, GDV, refinance, tax and sensitivity analysis, with a per-unit breakdown.
Converting a commercial building into flats is a development appraisal, not a purchase calculation. This tool prices the scheme per unit, builds the gross development value and shows whether the numbers survive a fall in end values.
A £280,000 commercial building converted into four flats at £150,000 of build cost each carries roughly £900,000 of total cost with fees and finance. At £275,000 a flat the gross development value is £1.1m — a 22% profit on cost that turns into 11% if values slip 5%.
Many conversions from commercial use to dwellings proceed under permitted development with a prior approval application rather than a full application, but the rights are conditional and vary by use class and location. Confirm the position for the specific building before you appraise it.
Twenty per cent on cost is the usual benchmark, and lenders often expect it before they will fund. It exists to absorb build overruns and a softer sales market, not to be handed back in the purchase price.
The end value. Build costs can be tendered and fixed; sales values cannot. Run the appraisal at values below today’s comparables and see whether the scheme still works.
Want this run on a real deal with you? Book a call, or take the whole set in the UK Property Investor Toolkit.