THE NUMBER of conversions of farm buildings into new homes fell by 20 per cent in 2016/17, according to peer-to-peer property lending platform Lendy.
Just 1,511 agricultural-to-residential conversion applications were approved, down from 1,890 in the previous year, weakening hopes that these conversions could help solve the rural housing crisis.
Figures show 38 per cent of applications for converting farm buildings into residential homes were rejected by local authorities.
Lendy argues that converting outbuildings like barns and stables into housing can be an effective way to tackle the housing crisis and allows farmers to tap into additional income streams.
The P2P platform added that another issue is that property developers can struggle to obtain finance from traditional banks.
Bank of England figures show that between December 2013 and December 2017, outstanding lending from banks to property developers dropped from over £34bn to £14.8bn. This has led to property developers turning to alternative forms of finance to build more homes.
“Converting farm buildings is one of the easiest ways to help solve the rural housing shortage, so this sharp drop-off in approvals is very disappointing,” said Liam Brooke, co-founder of Lendy.
“Agricultural-to-residential conversions can be a win-win for everyone –farmers can unlock capital from their land and more homes get built for prospective buyers – helping to close the housing gap.
“A shortage of bank finance for these conversions is another issue. This is why so many developers are turning to alternative forms of finance like P2P to get viable projects off the ground.”