Live/Work Rules

Hi All,

I am contemplating putting an offer in on a Live/Work unit but I don't want to work there I just want the extra space for living. Has anyone done this in the past and what are the implications. Is it fairly straight forward or should I not even bother.

Thanks.

You could ask the Planning Authority whether they might be willing to entertain an application for change of use to purely residential.

They will have worked with the developer in the first place, and live-work restrictions would most probably have been imposed because the development was on land that previously provided employment and the Local Authority wants to see mixed use remain in the area.

Live work units are usually cheaper than straight residential. I have no doubt that some estate agents will claim that there are no issues with simply using them as residential. And it may be true that some Local Authorities do not expend much effort on snooping. (Though the lack of a VAT registration would be an easy trigger for them to pick up on.)

Problems though are:
1. Council tax/business rate status.
2. Capital gains. The exemption on owner occupied dwellings presumably dont apply to the non-residential element.
3. A limited resale market.

Get change of use to residential though and you would be laughing.

It's a very good question deeno but I'm afraid it's an area where it's very difficult to get a clear answer.

The problem is that what constitutes Live/Work varies from borough to borough and as far as I know it has never been given a strict legal definition.

I was told by a friend who was at the time working for Southwark Planning Department that they're prepared to grant change of usage to residential once you've lived in the space for four years.

However, he subsequently claimed that Southwark no longer pays strict attention to this rule and you can apply at any time.

As this would make a mockery of designating places as Live/Work in the first place, I'd be interested to know if anybody knows the official line.

Deeno

I pulled out of purchasing a flat 18 months ago because I was nervous about the live-work issue. The estate agent had (obviously) claimed there would be no problem with just living there, but my investigations left me very doubtful.

There was a case in Hackney a few years ago which estate agents sometimes mention to show that a live-work restriction is meaningless. But that was because the restriction in question was vague, and was interpreted by a judge as meaning "you can live, or work, or both". Southwark are wise to this, and if they are still imposing live-work restrictions, they are very specific. A modern restriction will say: "Area X on the attached plan is for living only; Area Y is for B1 working only."

If you really like the property, I think you should first check the terms of the restriction. It will probably be in the lease, and in the planning permission. If it's an old restriction, of the Hackney type, you may decide there's no problem. But if it's a modern restriction, it means that until you get it changed, you would be in breach of planning control by not using Area Y for working. I tried to assess the risk of enforcement action being taken, and didn't get very far. But the signals I picked up were that Southwark would be prepared to act if a flagrant case of breach came to their attention.

You would also be liable for business rates on Area Y, unless you persuaded the valuation people that you weren't using it for business. That would be true, but wouldn't look good if Southwark (or Lambeth, as the case may be) came sniffing.

Finally, you'd be in breach of one of the terms in your lease. How much of the problem that would be depends on the freeholder's attitude.

And, as Sarah says, all this will depress the resale potential - unless you get planning permission for change of use, and get the lease changed as well. On the other hand, that's why it's cheaper.

Your risk appetite may be more robust than mine - I chickened out at this stage.

Good luck!

Richard

I looked at a live/work locally and the agents were very blasé about the whole thing, but when I checked out the situation with a lawyer a very different picture emerged. In the end, I wimped out. One pertinent question would seem to be: how can Southwark Council actually check up on and enforce the restrictions regarding the use of space?

longlaner wrote:

One pertinent question would seem to be: how can Southwark Council actually check up on and enforce the restrictions regarding the use of space?

They answer is they don't unless you bring it to their attention yourself - for instance by applying for planning permission for conversion works at a later date.

If you've had any dealings with the Planning Department, you'll know that they just don't have the resources to check up on issues like this.

That's why a huge proportion of live work units are used purely as residential.

Hi All,

I just wanted to say a thanks for all your helpful advice. I have decided against going for this property just because I don't have the time to take it through the proper channels in Southwark and I don't want to be lumbered with a non-saleable property when I need to move again. Not to mention all the hoops the mortgage brokers will require me to jump through.

Thanks again,
Anisha

Just by way of some possibly helpful information.

As a general rule, live/work means exactly that. If you buy it, you must live there and work there - paying council tax for the 'live' and rates for the 'work'.

Southwark are not at all keen on changing the status, for office space is worth less per square foot than is residential in SE1. If you bought it and tried to let it as live/work for a period of two years but without success then you would have a significant chance of obtaining planning permission for change of use.

If you lived in it for four years without being detected by the council or reported by a petulant jilted lover, then you can apply for a iirc 'certificate of lawfulness' for pure live status, which they cannot refuse.

The attitude of your freeholder, however, is quite another issue. They would probably require a cash payment in consideration for allowing you to change the use. (Remember, when they built it, they were required by Southwark to include live/work areas as a condition of planning permission, and these areas were sold for considerably less than the 100% live flats.

(100% live (sic) flats. ugh - sorry about that!)

What about if the person is only using the live/work unit as a place of work and does not reside there at all?

Does this have any implications?

Snigleroo

'Live/work' was a real disaster. It doesn't exist as a 'use class' under the Town & Country Planning Act and was used (by Local Authorities) to circumvent the constraints of 'employment areas' eg large chunks of North Southwark.

There is no way of regulating live/work in any formal sense unless the 'work' element of the space is entirely separate from the 'live' element including having a separate entrance. In that case the 'work' element will attract Uniform Business Rates and the 'live' element will attract Council Tax.

If you have the normal 'live/work' unit, say a two bedroom studio apartment with some sort of notional live:work split in the planning consent, then it will, generally, be banded for Council Tax. However, if you were to use a residential unit for entirely business use and if the Valuation Office were to be made aware of this, you could find yourself facing a Uniform Business Rating and that would be a lot more money than a Council Tax bill.

But that doesn't stop people doing just that. So just make sure that you don't start using industrial sewing machines and keeping your neighbours awake.

Regards.

Niall