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BUYING – Live to work or work to live? © Urban Spaces 2012
BUYINGLive to work or work to live?
BUYING – Live to work or work to live? © Urban Spaces 2012
Live/work describes properties whose space is designed to
incorporate both your professional and your personal lives.
The rise in small businesses and improvements in technology
originally led to many people utilising where they live for their
business ventures. Now things have evolved past using a
renovated shed or cooped up study; live/work spaces are partially
work orientated and are often popular in renovated warehouse
developments. Spacious and beautiful, these loft style spaces are
perfect for creating an inspirational working environment and a
relaxing home life.
A new kind of lifestyleThe concept of live/work originated in Hackney in the ’90s, where
the local authority was encouraging the regeneration of industrial
spaces, whilst trying to avoid moving to completely residential
developments. Live/work has since proved a successful lifestyle
choice and developments have sprung up across London and the
rest of the UK. Although there is quite a history of this lifestyle
being adopted by those in the creative sector, there is currently
growing interest from professionals in all business fields. For
those of you who are not yet enjoying live/work spaces, and for
those who are, hopefully this ebook can act as a useful guide.
The benefits• If you are currently renting out both an office and an
apartment, combining the two would be an instant money
saver
• How long is your current commute in hours? Take that
number and times it by 520. That’s how many hours
you could allocate to something else per year. The typical
Londoner could get back 368 hours. This roughly translates
to 46 working days! Cutting the commute commute out of
your life will save time, money and reduce stress
• You are likely to be able to take out a residential mortgage
instead of a business mortgage, which is typically much
more expensive. This likelihood is improved if your
workspace occupies less than a third of the total floor
space
• It is an environmentally friendly option. More people
working at home will reduce commuter pollution and
heating one building rather than two will save on energy
• There will be someone present in the property twice as
much as usual, reducing the opportunity for crime
• There are generally multiple live/work properties in a
building. You can take the opportunity to surround yourself
with a community of like-minded people to share ideas and
living spaces with
• The set up can help to restore a work/life balance
LIVE TO WORK OR WORK TO LIVE?
BUYING – Live to work or work to live? © Urban Spaces 2012
Potential issues• Selling on a live/work property could be an issue. Although
live/work is a fantastic selling point of a property, you are
instantly reducing the pool of potential buyers. Sellers have
overcome this by advertising the work space as a potential
luxury gym or library or even another bedroom. With this in
mind it is probably advisable to keep the work space fairly
non-commercial
• As it is a relatively new concept the legal issues are not yet
concrete, and there are a lot of grey areas. If you don’t have
reliable legal advice, you could find yourself in financial and
legal confusion. If you are not using the space as you have
claimed, you might find yourself in breach of the law, and
could be potentially forced out of your home
• Both the business and family can outgrow the original space,
so a clear idea of planning restrictions is important. You would
also require planning permission to change the property to
wholly residential or wholly commercial, so make sure the
regulations are clear beforehand
• With the wrong property, you could create too much of a
claustrophobic lifestyle for yourself, and possibly disrupt your
work/life balance. Make sure that you look comprehensively at
all the available options
Tax and legal aspectsLive/work spaces adopt the identity of both a workplace and a
home. This can be used to your advantage, but you have to be
careful to avoid any potential pitfalls. Below is a rough guide to
the tax and legal aspects, but be aware that rules can vary greatly
based on how open plan the space is.
• You can claim allowable expenses on all power, water etc. that
you can prove is used by the ‘work’ part of your property.
• On your mortgage you can claim 1/5 of the interest as an
allowable expense
• You will pay council tax for the living portion of the property
and separately pay business rates for your work space, which
are typically higher. This only not the case if the council has
classified the property entirely a residence, despite being used
also for business
• When selling the property you will have to pay Capital Gains
Tax of 18% on the work portion of the property, but none on
the living space if it is your main residence. However if you
have claimed a portion of your interest of your mortgage as an
allowable expense, it may follow that a corresponding portion
of the increase in the property’s value will be liable for Capital
Gains Tax
• If your property includes a B1 defined workspace you may
be liable for VAT when buying, but it is possible for this to be
claimed back
Class B1. Business
Use for all or any of the following purposes –
(a) as an office other than a use within class A2 (financial
and professional services),
(b) for research and development of products or processes, or
(c) for any industrial process,
being a use which can be carried out in any residential area
without detriment to the amenity of that area by reason of
noise, vibration, smell, fumes, smoke, soot, ash, dust or grit.
The living portion will be subject to inheritance tax if its value
is over £300,000 and the business portion will be completely
inheritance tax free.
Please remember that this is only a guide and it’s always best
to consult an independent financial adviser. With a solicitor
who specialises in live/work spaces it is fairly easy to navigate
legislation and even to benefit from the grey areas.
BUYING – Live to work or work to live? © Urban Spaces 2012
Some things to consider when searching for a live/work space:
• Start with the location. What companies do you tend to do
business with? Proximity to them could be important, likewise
with suppliers if you require specialist equipment. If your work
space doesn’t accommodate for meetings, you will need to
investigate nearby cafes or bars to use as appropriate ‘meeting
rooms’ and ideally these should be in an upmarket area in
order to create a professional environment
• Consider specific property features to match your business.
Do you need a lot of storage? Perhaps you require excellent
natural light? Ensure there is space enough for any specialist
equipment
• Consider also what kind of work/life balance you require.
Would it be better for you to have a clear distinction between
the two aspects of your life or do you find your profession is
the framework of your lifestyle. The space you choose can
allow for either
• Ensure that there is a phone line in the work space that would
be convenient for your desk area
• The idea in live/work spaces is to create harmony. Does the
property reflect the aspirations of your company and your
personal lifestyle?
Although these criteria are important to fulfil for your business,
don’t lose sight of the fact that you are buying a place to live in
as well. The property has to meet your personal life requirements
too. Make sure you love where you live.
Urban Spaces are London’s leading experts in live/work
spaces. As unique property specialists we don’t aim to cater
for the conventional market; we seek out properties that are
bold and different. For us it is about ‘one of a kind properties’
and we will continue to lead the live/work property market.
In such a niche market, you need the correct legal and financial
advice. Urban Spaces work in partnership with Greene & Co.
Financial Services and a selected panel of solicitors who have
expertise in dealing with live/work property transactions.
For more information about buying or selling your home, contact one of our experienced negotiators at one of our offices below.
URBAN SPACESt: 020 7251 4000 e: [email protected]
BELSIZE PARKt: 020 7483 2551 e: [email protected]
CLERKENWELLt: 020 7251 8877 e: [email protected]
CROUCH ENDt: 020 8348 7666 e: [email protected]
KENSAL RISEt: 020 8964 9999 e: [email protected]
KENTISH TOWNt: 020 7482 4777 e: [email protected]
MAIDA VALEt: 020 7286 8787 e: [email protected]
WEST HAMPSTEAD t: 020 7328 3232 e: [email protected]
NEW HOMESt: 020 7604 3200 e: [email protected]
RESIDENTIAL DEVELOPMENTS & INVESTMENTS t: 020 7328 9608 e: [email protected]
www.greene.co.uk