Conversion of Traditional Buildings Part 1: Principles and Practice
Some historic buildings are in areas of economic and social decline. These areas tend to provide a high proportion of the buildings identified in buildings-atrisk registers‡. Local authorities and Historic Scotland will be keen to ensure that these become vehicles for regeneration. The rotation of buildings on the register serves in part as an indicator of economic health as well as of the energy devoted locally to regeneration through heritage.
One of the principal differences between a new building and the conversion of an existing one is that the selection of materials, constructional forms and techniques may be limited in the latter, whereas in newbuild the choice is wide and limited mostly by cost. In conversion work, each project is unique and experience on one building, especially relating to cost data, can not always be transferred directly to another building. The room to manoeuvre may seem to be less than with new-build, as options relating to choice of materials or construction methods may be limited to those that will perform well in conjunction with existing fabric. A large part of the success or failure of a development may be attributed to initial decisions, but at each stage of the process it is necessary to consider what effect changes to the building will have on ultimate value, both financial and cultural.
For buildings within many conservation areas, there is a view among estate agents that the security provided by a conservation area may have the effect of increasing the value of an individual property. Being within a conservation area means that there is stability in the area. Development must enhance or preserve the character of that area, and the freedom of surrounding property owners to adversely change the quality of the built and natural environment is curtailed (PAN 71,2004 Management of Conservation Areas).
When comparing the cost-in-use, the advantage of a modern well-insulated building in terms of heating costs might seem clear. While a converted building of traditional construction can be improved – indeed, will have to be improved to meet the new regulations – it is unlikely to match the energy efficiency of a new building. Yet this ignores the significant amount of embedded energy contained within the fabric of an existing building. It will usually be difficult to insulate an existing building to the same standard as a new building without adversely affecting historic fabric. However, most buildings of traditional construction are more easily maintained over long periods than their modern counterparts; major repairs to the external fabric are less likely. The occupancy cost of most converted buildings may exceed that of a purpose-built modern building due, for example, to more generous space standards such as ceiling heights and common landings presented by the existing building. On the other hand, these restrictions are often balanced by the prestige of the building and its environment. A large house divided into a number of smaller ones gives some of the newly created flats the opportunity to have extraordinary living rooms with proportions and finishes unimaginable in a newly built house of similar cost. They can, then, hold their value well.
Historic buildings that are in good condition help to make the surrounding environment more secure. By reusing existing buildings and bringing them up to modern standards, the environment is improved and maintained, and economic activity stimulated. For office and retail premises, owners or occupiers may pay higher rents for buildings they perceive to be of high architectural merit and cultural significance. The argument for reuse, as opposed to demolition followed by new build, is further reinforced by the use of appropriate traditional skills in conversion or rehabilitation. Conservation is generally labourintensive and demands higher skills in using locallysourced and sustainable materials. The use of traditional skills in such circumstances promotes local employment opportunities and encourages training. 2.8 Financial considerations: Value Added Tax A factor that has a significant effect on the decision to convert a historic building is the additional cost of Value Added Tax (VAT). The current standard VAT rate of 17.5% is applied to most work to existing buildings, unless it can be charged at either a reduced rate of five percent or is ‘zero-rated’. The legislation surrounding VAT is very complex, and developers should seek advice from HM Revenue and Customs before any work is undertaken regarding the position of each individual building with respect to the application of the reduced rate or the zero-rate of VAT. The VAT legislation, unfortunately, does not offer any general relief for historic and listed buildings. Any relief is dictated by the individual circumstances of each project.
It is sometimes thought that listed buildings can be more difficult to sell or lease, because it is perceived by prospective purchasers or developers that the fact that it is listed imposes a constraint. It may alternatively be argued that a listed building presents an unmatched opportunity to the right developer. There is also the poorly-founded argument that historic buildings are more difficult and expensive to maintain. This view tends to ignore the financial, social, cultural and environmental costs of frequent replacement of, usually, poor quality, short-life buildings.
‡
The reduced five-percent rate applies to conversions carried out in the circumstances outlined in Box 2.3.
see http://www.buildingsatrisk.org.uk/
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