Home Improvement Blog: Have Barn

Feature - Have Barn - will convert!

Barn conversions – a way to make money in uncertain times?

With latest figures suggesting a crash in the property market, we consider whether barn conversions are still a profitable investment

Despite the credit crunch and predictions of a crash in the housing market, the number of outstanding buy-to-let mortgages went up 23 per cent to 1,038,000 at the end of 2007, according to the Council of Mortgage Lenders.

Investors have been drawn into the property market by the possibility of making substantial capital gains due to the boom in house prices over the last decade. However, figures for March from the Halifax House Price Index show a fall of 2.5 per cent, a decrease in value of around £5,000 for the average home.

With house prices beginning to fall, it's becoming harder to make a profit on property, but barn conversions might be the answer. While many dream of 'a place in the country', demand far outstrips the availability of such properties, with potential owners willing to pay over the odds for their own piece of rural idyll.

Consider the risks
It is all too easy to focus on the idea of making a huge profit and forget about the considerable risks involved in undertaking such a project. Firstly, there is the issue of planning permission. The obvious choice is to purchase a property on which planning permission for conversion has already been granted, though remember this decision will have been made on the basis of the detailed plans submitted to the council, so you may find yourself having to follow a design that is far from your original concept of the project.

If you do decide to buy a property on which planning permission is not already granted, you will be taking the risk that, no matter how sympathetic your plans for renovation, they may not be approved. However, while planners are reluctant to grant planning permission for new builds in the open country, they are often keen to see derelict buildings restored to their former glory. Ideally they would like to see such buildings converted for commercial use, bringing jobs and tourism to the area, and it is worth noting that there are grants of 30 per cent or more available to developers who choose to go down this route.

If research into the potential uses of the building and likely profitability of such a business show that this proposition is commercially not viable, then residential conversion may be granted if it is considered to be the only option.

The other, much more significant risk in undertaking a barn conversion is somewhat less obvious and may not occur to even an experienced property investor. While you may be granted planning permission to renovate an existing building, if it collapses or is destroyed by fire during building works, you are likely to find that planning permission would not be granted for rebuilding the property from scratch, even if the plans are identical to the building which previously existed.

If you bought the building with planning permission already granted you would find that the property would be worth less than what you originally paid for it, and even if this wasn't the case, you would be likely to find yourself with huge debts and nothing to show for it but a patch of land on which nothing may be built.

Value and Potential
If all that hasn't put you off, the next thing you need to consider is whether the potential value of the property is likely to significantly outweigh the cost of the project. For those who don't have the liquid assets to finance a potentially costly project, there are companies who offer mortgages specifically for self-builds and renovation work. The most obvious costs are the purchase price of the property, solicitor and surveyor's fees, and the charges for materials and labour.

However, on top of this you need to remember that when applying for planning permission for a renovation project, outline plans alone won't do, and drawing up full plans will require the knowledge and skills of an architect, architectural technician or building surveyor. You will also need to allow for the cost of site insurance, and a structural warranty would go some way towards protecting you from the risks outlined above. Finally, an often overlooked additional expense for this type of project is connection to services such as electricity, gas, water, drainage, telephone and highways, which, if your barn is in the middle of nowhere, can add a considerable amount to your budget.

But it is not all doom and gloom! Against this you need to consider the potential value of the property once work is complete. Usually located in the middle of unspoilt countryside, and often sporting character features such as ancient beams or stable doors, barn conversions have come to epitomise country living and are therefore considered to be prime real estate.

Often found in sought after areas, such as the Lake District and the Yorkshire Dales, location can add a premium to the price you could attain when you sell your property on. When selecting a property, look for quaint features such as a babbling brook or drystone walling, as this could make a potential buyer fall in love with the place and pay that little bit more to secure their dream home.

Finally, consider access to local amenities – a small village school or a nearby town with a weekly farmers' market are often part of that rural dream.

Finding a property
The obvious place to start the search for such a property is estate agents. In particular, keep an eye out for properties for sale by auction, as there are often bargains to be had. However, you may wish to consider less conventional methods to track down that elusive money-spinning investment.

Various conservation organisations produce extensive registers of buildings deemed to be 'at risk'. English Heritage holds a register of Grade I and II buildings, while Save Britain's Heritage publishes a list of Grade II listed properties. Alternatively, for something really unique have a look at “New Uses for Redundant Churches”, produced by the Church Commissioners, for a list of redundant churches, or perhaps consult the Unique Property Organisation, which advertises everything from barns and mills to castles, house boats, churches and schools.

Light and Space
It's important to remember that your barn was never intended for human habitation. Barns tend to be built as one large open space with few or no windows, and while cattle needed freely circulating air, it's unlikely your new residents will appreciate the draught! After installing the essential insulation, you need to carefully consider how to achieve a light and spacious feel without compromising the character of the building.

Dividing the vast space into usable areas, whilst making the most of the height and what little natural light you have, can be tricky. If your barn is surrounded by other buildings, like sheds or stables, consider converting these into bedrooms, preserving the main building as a communal living space. Alternatively, mezzanine levels can be introduced, creating additional floor space while retaining the open plan feel. Another option is to create an enclosed space at each end of the main building, creating an area in which you can house bathrooms and bedrooms whilst preserving the height and scale of the central space.

Light is the other key problem, and there is less flexibility here as planning regulations limit any changes that could impact on the external appearance of the building, so you need to make the most of what you've got. The most popular and eye catching way to do this is to glaze cart openings, which not only lets in light, but also makes the most of an integral feature of this type of building. Creating new openings for windows is discouraged, but may be permitted as long as the style and materials are in keeping with the original building. Your next thought might be to introduce dormer windows or rooflights. While dormer windows are a definite no-no, you may get away with rooflights if they are to be positioned where no one will be able to see them from the outside.

Another option that will help create a feeling of both light and space in your home lies in your decorating choices. Obviously pale colours will create a light and airy feel, but this can be further accentuated with reflective surfaces, so use plenty of mirrors and choose furnishings in materials like glass and steel. Although this may contrast with the otherwise rustic feel of your barn conversion, the contrast of traditional and contemporary can be quite effective.

So while it's no longer as easy to make a sizeable profit, with some careful consideration of the complex issues involved, investing in a barn conversion might be one area where there is still money to be made.

*Taken from our last monthly newsletter to over 230,000 home owners. To receive our free newsletter, click here. You can unsubscribe at any time.