While many property developers across the South East have traditionally focused on urban or brownfield sites, or existing residential conversions, looking at agricultural buildings as property development opportunities has been less common.
Although barn conversions are nothing new, other agricultural buildings like workshops, oast houses, granaries, and even modern steel-framed structures are being seen in a new light.
The South East boasts some incredibly affluent rural areas across Hampshire, East Sussex, West Sussex, Kent, Surrey, and Essex, and a well-executed project could prove to be very desirable to the right buyer.
This blog explores some of the potential opportunities around converting agricultural buildings, examines relevant changes to planning laws, and discusses some potential considerations before you take the plunge.
The Planning Case for Converting Agricultural Buildings
The numbers tell a compelling story. Between April 2014 and March 2023, approximately 5,000 homes were built on farming land through agricultural building conversions under Permitted Development rights (PDR).
Meanwhile, regulatory changes came into force in May 2024, which could increase this figure dramatically. Essentially, these updated regulations mean agricultural buildings that were previously in use before July 2023 can now be converted to residential properties without the need for full planning permission.
The government has doubled the number of homes that can be created from a single agricultural unit from five to ten, whilst increasing the maximum conversion space from 865 square metres to 1,000 square metres. However, these developments must still meet all prior approval conditions regarding things like location, access, flood risk, design and their suitability for habitation.
The Financial Case for Converting Agricultural Buildings
The financial appeal of these property development projects is potentially substantial.
Rural house prices have consistently outperformed urban areas, with properties in predominantly rural regions appreciating by 23% between December 2019 and December 2024, compared with just 18% in urban areas.
This premium reflects growing demand for countryside living, a trend accelerated by changing work patterns, increased cost of living in major cities and a desire for more space and tranquillity.
In the South East, areas like the Surrey Hills, South Downs, High Weald, Kent Downs, North Wessex Downs and the Chilterns are all incredibly desirable, while still offering good access to the capital.
The Agricultural Buildings to Look Out For
While barn conversions can be a good entry point or first time project, they are limited in number. Experienced and ambitious developers are looking at the broader landscape of agricultural structures.
As luck has it, the South East is particularly rich in diverse agricultural buildings, each offering unique development potential.
Oast Houses
Although not unique to the South East, oast houses are particularly associated with Kent and East Sussex, and remain distinctive features on the landscape.
These former hop-drying buildings, with their generous proportions, historic charm and distinct architectural character, have successfully been converted into high-value family homes throughout the region, and can command premium prices in the property market.
Granaries & Stables
Both of these types of buildings offer excellent conversion potential due to their typically robust construction and appealing proportions. These buildings often feature desirable original details like exposed beams and high ceilings, whilst being structurally sound enough to meet modern building standards.
However, although some former stables offer an excellent footprint, they may only be single storey, with minimal scope to expand upwards.
Livestock Buildings
Although perhaps less romantic than old timber-framed barns, former livestock sheds can be cost-effective and profitable conversion projects. Their simple rectangular layouts often translate well into contemporary open-plan living spaces that appeal to modern buyers. However, they may require more investment to repair and turn into a habitable home.
Even modern steel-framed agricultural buildings could prove viable. Whilst they lack the rustic charm of traditional structures, they offer flexibility for contemporary design and can be more straightforward to convert from a structural perspective.
Outbuildings
Although much smaller, outbuildings such as stores and workshops can also be converted into small, characterful properties. These can then be rented out as holiday lets, or used as extra accommodation for family or friends.
If you plan to rent them as holiday lets, you may need additional planning permission, depending on your local authority.
The Costs Involved With Agricultural Conversions
Conversion costs can vary dramatically depending on the scale of the project, but you should expect to invest between £1,750 and £3,000 per square metre. Stone barn conversions tend to be the most expensive, whilst brick structures are typically cheaper to convert, but a completed project could easily cost between £250,000 and £500,000.
However, well-executed projects can command significant premiums in the resale market due to their unique character and limited supply in the South East. Because they are rare and at the higher end of the market, they can also be well-insulated from fluctuating house prices, often appreciating when others may depreciate.
The Challenges of Agricultural Conversions
Of course, agricultural building conversions come with several challenges:
- Prior approval processes still require careful navigation, with considerations around ecology surveys, contamination assessments, and highway access.
- Buildings must be structurally sound, and developers need to manage expectations around costs, as hidden issues frequently emerge during conversion work.
- Agricultural buildings in protected areas such as the South Downs National Park, or various National Landscapes, may need additional planning permission.
However, for property developers with access to appropriate finance and expertise in rural projects, agricultural buildings represent an increasingly compelling opportunity. The combination of streamlined regulations, strong market fundamentals, and limited housing supply in rural areas creates a powerful investment case. With the right approach and financing, these rural structures could indeed be the next big opportunity.
We’re always eager to work with talented property developers in the South East, and we have experience in financing successful agricultural conversions, including:
- Detached 4-bed new build Barn in Daventry, Northamptonshire
- Barn Conversion in Lewes, East Sussex
- Farm House Conversion in Hobbs Farm, Yapton, West Sussex
- Barn Conversion in Midgham, Berkshire
So, if you need property development finance, we’d love to hear from you.
