Permitted Development Finance East London 2026 | BEMS Ilford

Sep 8

9 min read

Vacant and under-used office space, retail units and other commercial premises are a familiar sight across Ilford, Barking and Romford high streets, and a growing number of East London developers and investors are converting these buildings into residential units under permitted development rights rather than pursuing full planning permission. The Class MA permitted development right allows a wide range of commercial buildings to be converted to residential use through a faster prior approval process, and following changes in 2024 it has become significantly more accessible than in previous years.

Financing a permitted development conversion is different from financing a standard buy-to-let purchase or a ground-up new build, and requires lenders who understand both the planning mechanism and the practical realities of converting commercial space into good quality homes.

BEMS (Bains Express Mortgage Solutions) is based in Ilford IG1 and arranges finance for permitted development conversions across East London. This guide explains how Class MA permitted development works and how to finance it in 2026.

Quick Answer

Permitted development finance for a Class MA conversion is typically structured in two stages: bridging or development finance to fund the purchase and conversion works, followed by a refinance onto a standard or buy-to-let mortgage once the residential units are complete and habitable. Lenders assess the developer's experience, the gross development value of the finished units, and the exit strategy. Class MA now applies to buildings without a floorspace limit and without a vacancy requirement, provided the building has been in qualifying commercial use for at least two years. BEMS in Ilford IG1 arranges permitted development finance for East London investors and developers. Contact: +44 7849 673622.

What Is Permitted Development (Class MA)?

Class MA is a permitted development right that allows buildings in commercial, business and service use, known as Class E, including offices, shops, gyms, restaurants and professional service premises, to be converted to residential use (Class C3) without the need for a full planning application. Instead, the developer submits a prior approval application, which is a faster and more limited process where the local planning authority considers specific factors such as transport impacts, contamination, flooding, noise, and adequate natural light to habitable rooms, rather than a full assessment of the principle of residential use.

Following amendments introduced in March 2024, two significant restrictions were removed from Class MA. The previous 1,500 square metre floorspace limit no longer applies, meaning larger commercial buildings can now qualify, and the requirement for the building to have been vacant for three continuous months before the application was also removed, allowing developers to acquire income-producing buildings and begin the prior approval process without needing to secure vacant possession first.

The building must still have been in qualifying Class E use for at least two years continuously before the prior approval application is submitted, and the right does not apply to listed buildings, buildings in national parks, Areas of Outstanding Natural Beauty, World Heritage Sites, or certain protected ecological sites.

Why East London High Streets Are Prime for PD Conversion

Ilford, Barking, Romford and the surrounding East London town centres have seen significant change in high street retail and office demand over recent years, leaving a number of buildings that are well suited to residential conversion under Class MA. Upper floors above shops, former bank branches, small office buildings, and other Class E premises in these town centres are frequently well located near stations, bus routes and local amenities, exactly the attributes that make them attractive as new homes even though they may no longer suit their original commercial use.

For investors and developers, the appeal of Class MA in East London lies in the combination of relatively affordable commercial property prices compared with prime central London locations, strong rental and sales demand for well-located flats, and a faster, lower-risk route through prior approval compared with a full change of use planning application.

The Prior Approval Process

Unlike a full planning application, prior approval is a more limited process. The local planning authority has 56 days to determine the application (in most cases), and can only refuse or impose conditions in relation to a specific, defined list of matters, which typically includes:

Transport and highways impacts, including safe access to the site

Contamination risks affecting the building

Flooding risk

Impact of noise from existing commercial premises nearby on the intended residential occupiers

Adequate natural light in all habitable rooms

Where relevant, the impact on the character and sustainability of a conservation area, if converting ground floor space

The council cannot generally refuse the application on the basis that it objects to the principle of residential use in that location, which is the key advantage of the Class MA route over a standard planning application. The full legal detail of the right is set out in the General Permitted Development Order on legislation.gov.uk, and guidance on when prior approval is needed is available from the Planning Portal.

Case Study: A Former Bank Branch in Barking Town Centre

A developer identified a vacant former bank branch on Barking's high street that had been in continuous Class E use for well over two years. BEMS arranged bridging finance to complete the purchase quickly, ahead of a competing cash offer, while a planning consultant prepared the prior approval submission covering transport, light, and noise considerations for the upper-floor residential units proposed. Once prior approval was granted, the bridging facility was extended into a staged development finance arrangement to fund the conversion of the building into six one and two-bedroom flats. On completion, four units were refinanced onto buy-to-let mortgages and two were sold, with the sale proceeds used to reduce the overall borrowing.

Financing a PD Conversion: Bridging and Development Finance

Bridging Finance for Purchase and Light Conversion

For smaller conversion projects, particularly where the works involve internal reconfiguration rather than substantial structural change, bridging finance can fund both the purchase of the commercial building and the conversion costs, with the loan repaid on completion of the works through a refinance or sale.

Development Finance for Larger or More Complex Schemes

Where the conversion involves more substantial works, multiple units, or significant structural change, development finance is typically more appropriate. Development finance is drawn down in stages against the progress of the works, with funding assessed against the total project cost and the gross development value of the completed units.

Refinance Exit onto Buy-to-Let or Residential Mortgages

Once the residential units are complete and have received the relevant certification, the exit from bridging or development finance is typically a refinance onto standard buy-to-let mortgages for units being retained as rental investments, or a sale of individual units where the strategy is to sell on completion.

Lender Requirements for Permitted Development Finance

Lenders financing Class MA conversions typically look for:

Evidence of the developer's experience, either in previous conversion projects or in the broader property or construction sector, particularly for larger schemes

A realistic build cost schedule and contingency, given that converting commercial space to residential use often reveals unexpected issues once works begin

Confirmation that the prior approval has been granted, or in some cases, in-principle finance agreed subject to prior approval being secured

A credible exit strategy, whether sale of the completed units, or refinance onto buy-to-let mortgages supported by realistic rental projections for the local East London market

BEMS works with specialist bridging and development finance lenders who understand the permitted development process and can structure finance around the realistic timeline of a Class MA conversion, including Shawbrook Bank, Together, and United Trust Bank, all of whom are active in funding commercial-to-residential conversions across London and the South East.

Finance Options at a Glance

Stage	Typical route	Best suited to
Purchase of the commercial building	Bridging finance, drawn quickly against the building's current commercial value	Buildings not yet mortgageable as residential
Conversion works	Development finance, drawn in stages against build progress	Multi-unit or structurally significant conversions
Light internal reconfiguration	Bridging finance covering purchase and works together	Smaller, single-unit or minimal-works conversions
Post-completion exit	Refinance onto buy-to-let mortgages, or sale of individual units	Units being retained as rental investments, or sold on completion

Planning Considerations and Restrictions to Check Before You Buy

Article 4 Directions

Local authorities can remove permitted development rights in specific areas through an Article 4 direction, which means Class MA would not apply and a full planning application would be required instead. Some East London town centre and conservation areas are subject to Article 4 directions restricting office or commercial to residential conversion, so checking the position with the relevant council before purchasing a building is an essential first step.

Minimum Space Standards

Even though Class MA does not require a full planning application, converted units must still meet the government's nationally described space standards for new homes. A prior approval application that does not meet these standards is very likely to be refused, so the layout of proposed units should be checked against the standards before an application is submitted.

Two-Year Use Requirement

The building must have been in genuine, continuous Class E use for at least two years before the prior approval application. Buildings that have changed use, been used unlawfully, or where the use history is unclear can create complications, so verifying the lawful use history is an important part of due diligence before purchase.

East London Postcodes We Cover

BEMS arranges permitted development finance for investors and developers across all East London postcodes, including:

IG1, IG2, IG3 (Ilford town centre, Gants Hill, Newbury Park, Seven Kings)

IG11 (Barking town centre)

RM postcodes (Romford town centre, Chadwell Heath)

E7, E11, E15 (Forest Gate, Leytonstone, Stratford)

The Permitted Development Finance Process: A Timeline

Month 1: identify a suitable Class E building and confirm its two-year use history and Article 4 status with the local council

Month 1 to 2: instruct an architect or planning consultant to prepare the prior approval application and confirm proposed units meet space standards

Month 1 to 2: BEMS arranges finance in principle for the purchase, structured around bridging or development finance depending on project scale

Month 2 to 4: prior approval application submitted, with a statutory determination period of 56 days in most cases

Month 4 onwards: conversion works commence, funded in stages through the agreed development or bridging facility

On completion: units are refinanced onto buy-to-let mortgages or sold, repaying the development or bridging facility

Common Mistakes Made by East London PD Developers

Not Checking Article 4 Status Before Exchanging Contracts

Purchasing a building without first confirming whether an Article 4 direction removes Class MA rights in that location can turn a straightforward conversion into a full planning application, adding significant time and risk to the project.

Underestimating Conversion Costs

Converting commercial space, particularly older buildings, into residential units frequently uncovers issues around fire safety, sound insulation between units, and building regulations compliance that were not apparent at the outset. A realistic contingency, typically 15% to 20% of the build cost, should be built into the finance plan.

Assuming Prior Approval Is Guaranteed

While Class MA prior approval is a more limited process than full planning permission, it is not automatic. Applications can still be refused on the specific grounds available to the council, so a proper pre-application assessment of transport, contamination, flooding, and light issues is worthwhile before committing to a purchase.

Pro Tips for East London PD Investors

Check Article 4 direction status and the building's two-year use history with the local planning authority before making an offer

Instruct a planning consultant experienced in Class MA applications specifically, rather than a general planning advisor, given the specific and limited grounds for refusal involved

Contact BEMS early in the process so finance can be structured around your specific project timeline and exit strategy

Build a realistic contingency into your conversion budget, particularly for older East London commercial buildings where unexpected structural or compliance issues are common

Frequently Asked Questions

Do I need planning permission to convert an office to flats in East London?

In most cases, no. Under Class MA, a prior approval application is required instead of full planning permission, provided the building qualifies and is not subject to a local Article 4 direction removing that right.

Is there still a size limit on Class MA conversions?

No. Following amendments in March 2024, the previous 1,500 square metre floorspace limit was removed, meaning larger commercial buildings can now qualify for Class MA conversion in principle, subject to the other conditions.

Can I convert a building that is still occupied by a commercial tenant?

Yes. The three-month vacancy requirement was also removed in March 2024, meaning you can now begin the prior approval process for an occupied, income-producing building, though the practicalities of timing the conversion works around any existing tenancy still need careful planning.

How is a permitted development conversion financed differently from a standard buy-to-let purchase?

A PD conversion typically requires bridging or development finance for the purchase and conversion works, since the building is not immediately mortgageable as residential property, followed by a refinance onto a standard buy-to-let or residential mortgage once the units are complete.

Does BEMS help with permitted development finance across all East London postcodes?

Yes. BEMS arranges permitted development and conversion finance for investors and developers across Ilford, Barking, Romford, Stratford, and all surrounding East London postcodes. Contact us for a free initial consultation. Available Monday to Friday 9am to 5pm and Saturday 9am to 2pm.

Conclusion: Class MA Opens Up East London's High Streets

The relaxation of Class MA permitted development rights in 2024 has made converting East London's under-used commercial buildings into residential units a genuinely accessible strategy for a wider range of investors and developers. Getting the finance structured correctly, from initial purchase through conversion works to final refinance, is what turns a good planning opportunity into a successful project.

BEMS provides honest, specialist advice on permitted development finance from our Ilford office. We serve investors and developers across Ilford, Barking, Romford, Stratford, and all surrounding East London areas. Book your free permitted development finance consultation today. Call +44 7849 673622 or visit 31 Woodlands Road, Ilford, IG1 1JL.