In this article, we explore a hypothetical scenario involving a landowner aiming to transform several existing buildings to unlock new commercial opportunities.
From converting barns into business units to turning cottages into holiday lets, we explore some of the key legal considerations that must be addressed before any redevelopment begins.
The scenario
Imagine a traditional, owner-managed farm holding—an interwoven mix of heritage and hard work, with a blend of older and modern buildings historically used for cattle. For years, the farm has been managed by the owner alongside a loyal farm worker who has recently retired, leaving behind a vacant worker’s cottage.
Now, faced with rising input costs, the owners must explore new approaches. Change is never easy—it brings risk and uncertainty. But it also opens the door to opportunity. In this case, the chance to repurpose existing buildings and the newly available cottage to unlock fresh income streams and secure the farm’s long-term viability.
Don’t skip the red tape: planning rules still apply
Before diving into new uses for farm buildings or cottages, it's critical to understand the planning implications. Many changes of use require formal planning permission. However, certain permitted development rights can help:
• Class Q: Allows conversion of agricultural buildings to residential dwellings (in some areas).
• Class R: Permits specific commercial uses, such as storage or light industrial purposes.
We strongly recommend engaging with your local planning authority and advisors early. Making assumptions without proper checks can lead to costly enforcement action down the line.
The commercial buildings: from barns to business hubs
If planning permission has been secured and the buildings are converted, the next step is deciding how to manage them.
Letting out buildings to other business users can be lucrative, especially in rural areas with good transport access. However, it’s essential to approach the legal structure carefully.
Lease or licence?
• Leases may grant tenants security of tenure under the Landlord and Tenant Act 1954, giving them the right to renew their lease. This may offer stability, but if you want the space back at the end of the term, you'll need to contract out of the Act correctly from the start.
• Licences, by contrast, offer more flexibility and make it easier to remove tenants, but only if structured properly. It's easy to unintentionally grant lease-like rights, which can complicate future possession.
This area of landlord and tenant law is a common source of disputes, particularly when notices are served incorrectly or key legal steps are missed.
The cottage: breathing new life into a vacant home
The retired worker’s cottage is now empty, presenting two main letting options:
• Assured shorthold tenancy (AST) for long-term residential rental
• Holiday let, ideal if the farm is in a scenic or well-connected location
Key considerations:
• Agricultural occupancy conditions: These may restrict the cottage’s use to someone employed in agriculture. You may need to apply for a removal or prove non-compliance over time.
• Restrictive covenants: Check for title restrictions on letting or business use. These can sometimes be modified or discharged if they’re obsolete or unidentifiable.
Subject to these checks, the cottage could offer a steady income—either through traditional tenancy or as a high-yield short-term let.
Compliance check: stay on the right side of regulation
Letting residential property brings additional obligations:
• Renters reform: the upcoming Renters Rights Act will ban no-fault evictions (Section 21), strengthen tenant protections, and convert all ASTs into periodic tenancies.
• Energy standards: Minimum Energy Efficiency Standards (MEES) require a property to have an EPC rating of E or better. A tightening to C has been proposed and may eliminate current exemptions for holiday lets or historic buildings.
• Tax and licensing: holiday lets may be subject to different tax rules, business rates instead of council tax, and sometimes require local authority licences.
Additionally, any of these changes may impact property tax reliefs, so advice from a tax specialist is essential.
From vision to value: final thoughts
Repurposing buildings and reimagining how the farm generates income can modernise your holding, enhance its value, and safeguard its future. But it’s not without complexity.
Early professional advice is essential.
Consult with:
• Solicitors (for leases and property law)
• Planning consultants
• Tax advisers
• Land agents
With the right guidance, your vision can become a sustainable, long-term asset.
If you encounter challenges along the way, don’t hesitate to get in touch—we’re here to help. Please contact our rural property disputes specialist Estella Prince, Legal Director (estella.prince@hagenwolf.co.uk), if you have any questions.
