Reconversions are the next big trend

There was a time when scaffolding and a builder's board outside a large city house meant it was being converted into flats. These days the trend has reversed, and it is more than likely that a skip heralds the rebirth of a family home.

City squares which were plunged into darkness after office hours have a new vitality as residential life pushes out the commercial, and warren- like terraces of bed-sits are redesigned as large, single homes.

A number of factors have coincided to bring about this trend. The shortage of family homes; the reluctance of couples to commute; the end of commercial leases and the fall in business rents - and, in central London, the fact that house prices have risen faster than prices of flats, which fell further during the recession.

All this adds up to an unprecedented interest in properties with the potential to give a family the space they need. And if a period house has been damaged beyond repair by the initial carve-up, it is some consolation that conservation officers are not so likely to object to radical internal alterations. In fact, the enthusiasm conservation organisations have shown for the return of houses to their original use has encouraged the process.

For Northacre, the support of English Heritage for its plans to turn a complete west London Georgian terrace back into single homes was crucial. John Hunter, director of Northacre, is working closely with English Heritage on restoring the 25 houses in Earl's Terrace, Kensington.

"English Heritage insists on a certain layout of the dining room and drawing room, and that the original staircase should be repaired and put back," he says. Work on the first of these houses overlooking Edwardes Square has transformed it from an eyesore of five flats to a luxurious, six-bedroom family home.

Houses that sell for millions may be beyond the pocket of most of us, but if developers are finding it more profitable to revert than convert, there is a message for everyone. In Holland Park, the prices people will pay for a whole house have made it worthwhile moving flat-owners on by paying them a premium. And in Mayfair, the balance is shifting from the commercial to the residential.

Peter Wetherell, of Wetherell, the Mayfair property specialists, thinks the area could become a London village again. In Fitzroy Square, owner- occupiers are beating the developer at his own game. David Thorne of Savills explains. "They can afford to pay more because they don't need the profit margins, and are not looking for a quick turnaround. No one is interested in these houses as offices any more, so professional couples, mostly, are jumping in. They can even reclaim VAT for a conversion back to residential use."

In Scotland the story is the same. John Brown, of DTZ Debenham Thorpe, believes that the commercial properties in the West End of Edinburgh will be the most sought after in the country for conversion back to residential use. "When a Georgian house comes on the market and is not too badly damaged, a family will buy it. What is lovely is that the city is becoming a place to live and work." An unconverted West End house will sell for between pounds 220,000 and pounds 320,000 and, when done up, for about pounds 500,000.

But it is not just in prime city areas that families are getting a foothold. From Plymouth to Nottingham, large but solid middle-range Victorian and Edwardian homes are being earmarked by house hunters frustrated by the lack of good houses. In London, private buyers frequently appear at auctions where local authorities are selling off rental stock. There are also a growing number of flat owners with an eye on buying the whole house. A south London agent gave a not uncommon example of someone living in a pounds 150,000 flat buying the other two in the same house for pounds 130,000 each and so acquiring a large property for just over pounds 400,000. After spending pounds 100,000 on reconverting it, the house would resell for pounds 600,000.

At the same time as John Hunter was buying Earl's Terrace, he bought a house of bed-sits in Clapham as a family home. "We set out to look for an unmodernised home, not bed-sits. It was all there was." What advice would he give a layman taking on such a project? "Get a good architect," he says adamantly.

Louise and John Hunter were looking for a family house in London that they could do up. "There was not a lot around even three years ago," says Louise Hunter. "We knew we wanted a wreck, and in the end the only house with the right space was this one which was divided into five bedsits. It was ghastly. It took 10 months of concentrated work during which we gutted the house and now we have everything we want here." The Hunters, who have three young children, have a six-bedroom home with four bathrooms. They even converted the cellar into comfortable living space. "While the work was being done we thought why not raise the ceiling and do the job properly. That's the great thing about starting from scratch."