Heritage-to-housing: What historic building reuse could mean for housebuilders

Key Points

1. Proposed reforms could make heritage-to-housing a more viable development route, with a ‘reuse first’ approach creating opportunities to convert vacant or underused historic buildings into new homes.
2. Heritage-to-housing projects can support ESG objectives, prove commercially attractive and appeal to local communities, but they also bring challenges such as complex builds, higher costs, difficult planning considerations and tax issues.
3. We can help housebuilders assess opportunities, manage legal and commercial risk, and navigate real estate, planning, construction, funding and tax issues from the outset.

Historic building reuse for housing: Cultural and commercial context

Although housebuilding has been a critical concern for successive governments, the focus has often been on green field or brownfield sites, rather than reusing existing buildings. The Protecting Built Heritage Report (the Report) from the Culture, Media and Sport Committee, published in July 2026, estimates that up to 670,000 homes could be created by repairing, converting and repurposing vacant or underused historic buildings. This would represent a significant portion of the government’s housing goals. The Report found that the UK’s built heritage has immense cultural and economic value, but new policies are required to both protect it and unlock its full potential.

In this article, we outline the opportunities and challenges presented by converting historic buildings to housing, and how proposed reforms may impact housebuilders and developers.

What are the key proposals?

 Key recommendations from the Report include:

• moving to a reuse first approach embedded within the National Planning Policy Framework, with converting historic buildings prioritised over new build options
• the introduction of a ‘heritage-to-housing’ scheme that draws on similar schemes abroad to bring vacant and at-risk historic buildings back into residential use
• establishing a national high-street repurpose programme as a central part of the national reuse first housing strategy
• reforming VAT rules which favour demolition over conservation and introducing targeted VAT relief for maintaining or converting heritage buildings
• the creation of a comprehensive national dataset on the condition, ownership and maintenance of heritage sites, which is updated annually and made publicly available
• the introduction of a clearer, more aligned, long-term strategy for funding heritage projects, potentially including dedicated public funding for heritage development
• faster and more consistent planning decisions, alongside greater investment in planning officers and heritage/conservation specialists – measures beyond those introduced in the updated National Planning Policy Framework August 2026 (NPPF)
• publication, within 2 years of the NPPF, of an assessment of its impact on heritage development
• more standardised and accessible use of Local and National Listed Building Consent Orders
• a greater focus on creating programmes which address critical shortages in traditional building and heritage trades
• A ‘lead by example’ approach, with the government ensuring that publicly owned heritage assets are properly maintained and, where appropriate, brought back into beneficial use.

Key considerations for housebuilders

The opportunities:

For housebuilders, the Report points to a potential shift in how housing delivery is approached. A stronger reuse first policy could make heritage assets a critical part of the development pipeline, particularly in areas where land availability is constrained. Vacant or underused historic buildings could provide a source of new housing beyond green field or traditional brownfield development. Former mills, schools, banks, offices, warehouses and other redundant civic or commercial buildings may all become more attractive conversion opportunities if the Report’s recommendations are adopted. For developers able to identify suitable assets early, there may be scope to unlock value in buildings that have historically been seen as too difficult, costly or uncertain to redevelop. In Yorkshire and Lancashire alone, unused textile mills could provide 42,000 new homes [1]. The uniqueness and character of such properties means, of course, that, once redeveloped, they’re highly sought and saleable.

Heritage-to-housing schemes can also support regeneration and align with ESG priorities. From a net-zero perspective, “the greenest building is the one that already exists”: reusing existing structures can reduce carbon emissions by 40-80% compared to new build projects [2].  Historic buildings are also often located in town and city centres, close to existing infrastructure, services and public transport. That can strengthen the sustainability case for redevelopment, reduce the need for costly new infrastructure to support housing delivery, and potentially align with the ‘default yes’ planning presumption for well-connected developments.

Heritage conversion projects also strengthen local communities and preserve the historic fabric and distinct character of an area. Successful schemes often act as catalysts for local investment, particularly where they bring vacant buildings back into active use. Homes near listed buildings can command a price premium of 10%, and the wider public value of heritage is significant; and 71% of people say local historic buildings are important to their quality of life [3]. Meaningful engagement with the community can be essential to give a project the best chance of success. Where these schemes are well communicated, designed and commercially viable, they’re likely to appeal to local authorities, communities, funders and purchasers alike.

The challenges:

However, such projects are rarely straightforward. Even with proposed changes, developers must navigate complex planning and listed building consent requirements. Inconsistencies between local authority decisions and delays can mean a lack of certainty for developers. Implementing the Report’s recommendations to increase speed and certainty in the planning process is therefore central to unlocking more heritage-to-housing projects.

Meeting modern residential needs and regulations while preserving the historic importance of a site can be challenging too. For instance, although projects which reuse existing buildings further net-zero goals in many respects, current Energy Performance Certificate (EPC) Standards can be difficult to meet. The Report noted that solar panels, heat pumps and insulation were energy efficiency measures frequently subject to planning restrictions. Insulation can be particularly challenging as traditional buildings tend not to have cavity walls, while external cladding is unlikely to be permitted. Accessibility requirements may, in some cases, also be hard to retrofit. However, the updated NPPF now already allows for such energy-efficiency and low-carbon measures to be considered along with the ‘public benefit’ aspect of planning decisions.

Furthermore, converting historic buildings can be more costly and complex than new builds due to unforeseen structural or technical challenges. P J Livesey Group reports heritage build costs as typically 20% higher than a comparable new build. This is a critical consideration, not least in the current economic climate, with many projects seeing construction costs rise between 30% and 50% in recent years. Older structures often require more detailed and intrusive surveys, and issues (and therefore costs) tend to be more difficult to predict than with new build construction. Housebuilders can mitigate risk by ensuring contractors have sufficient skill and knowhow to convert historic buildings, and by appointing Conservation Accredited Architects. Hence the Report’s recommendations around skills across the heritage sector.

Tax considerations, particularly VAT, may also affect viability. Again, the Report stresses that changes in this area would remove a significant financial barrier that often prevents the conversion of heritage buildings. Business rates (where projects combine both residential and commercial use) may add a further prohibitive cost, so it’s a further area for developer consideration and/or potential reform.

How we can help

As a full-service law firm with dedicated living sector focus, we can support housebuilders at every stage of a heritage-to-housing project. Our Real Estate team can advise on site acquisition, title due diligence and development agreements – working closely with our Planning specialists, who can help navigate complex planning strategy, listed building consent and other heritage-related approvals. Our expert Real Estate Litigators can advise and assist on site assembly and recovery of possession, as well as on the modification or discharge of covenants or other matters potentially affecting heritage projects. Our Construction lawyers can support with construction documentation and procurement arrangements, and our Banking & Finance team can advise on development funding and financing structures. Alongside this, our Tax experts can help clients manage tax considerations throughout the project lifecycle.

By seamlessly bringing together cross-discipline expertise, we help clients assess opportunities, identify key legal and commercial risks, and structure a clear route through the development process. Our integrated approach enables informed decision-making from the outset and helps reduce the risk of unexpected delays, costs or consent issues.

We’ll continue to monitor proposed policy changes in this area and what they could mean for housebuilders looking to capitalise on the opportunity to convert historic buildings into new homes. Please contact David, or your usual Walker Morris contact, for further information or advice.