Space for your own thing

Res/com are the new live and work units. Chris Partridge checks out the pros and cons

Live/work units, part flat, part office, may be going the way of the dinosaur, killed off by an inability to adapt to changing circumstances. And a new form of planning permission, tentatively called res/com, is being put forward as the way of the future. Owners of res/com units will be able to use them as offices, as flats or any combination of the two. The idea that people will be able to do what they like in their own property is potentially revolutionary.

Live/work units, part flat, part office, may be going the way of the dinosaur, killed off by an inability to adapt to changing circumstances. And a new form of planning permission, tentatively called res/com, is being put forward as the way of the future. Owners of res/com units will be able to use them as offices, as flats or any combination of the two. The idea that people will be able to do what they like in their own property is potentially revolutionary.

Live/work units were hailed as the future of the inner city when they were introduced in the 1990s, but they have not aged gracefully. People who bought live/work units had found them great at first, but if their business expanded they soon ran out of space for the extra staff. Once the company had moved out, they didn't want to move - so the live/work unit became live/live.

Then the business expanded so much the owner could afford to move to a bigger place - and when they came to sell their live/work unit, they found the price they could get for it was 30 per cent less than the price for a regular apartment. And great was their distress.

And council planners have begun to get worried that live/work units are not generating the jobs they had hoped for, and some have even threatened to prosecute live/work residents for not working in them. But people still need places for both life and work, and planners still want to attract jobs to unappealing inner city areas. And thus res/com was born, in an old bank in Cardiff called Crichton House.

Res/com (not a lovely word) is short for residential/commercial, and the idea is that the owners can do more or less what the like with their own space. Flexibility is the key, says Mark Andrews, director of Loft-co, the developers behind Crichton House. "The res/com idea is that a property can be used for living or working without any restriction," he says. "When business expands, you can buy the unit next door and put the office there while living in the flat, or use the whole flat as an office and live somewhere else."

The flexibility of use should make them attractive to start-up businesses with needs that cannot be predicted accurately, as well as single traders whose family needs are likely to change with marriage, family and so on. But this flexibility is also good for investors, Andrews says: "If the property is more valuable as a flat, you sell it as a flat. If it is more valuable rented out as an office, you rent it out as an office."

In inner-city areas emerging from dereliction, such as Cardiff Bay, property use fluctuates unpredictably between commercial and residential. Investors and owners can be badly burned if they choose to go for residential in an area that suddenly becomes overwhelmingly commercial, and vice versa.

With res/com, investors can go with the flow. "Usually, residential seems to have the highest land value but, from an investor's point of view, it will rent as offices to get a better return. Someone just starting out can live in it and work as well," Andrews says. "The aim is sustainability; as the market changes, so will the occupiers."

A bonus is better security for residents and workers. "One of the nice things about it is that the building is occupied 24-7 for security, the workers during the day and the residents at night," he points out. Despite the flexible use, a commercial appearance is important. "The building has to look like an office because the office users want to maintain a professional front," he adds.

Inside, the fit-out of each unit is a bit of a compromise. As in an office, power outlets and computer network sockets are everywhere, but there is also a kitchen and bathroom. "We deliver the units with a kitchen, toilet and shower - a bath looks out of place in an office," Andrews says.

The stumbling block for res/com is, as so often is the case in life - tax. Residents pay community charge, businesses pay uniform business rate (UBR). As businesses pay substantially more than voters, the council will take a close interest in how much business is actually being done in a res/com block. "The big difficulty is council tax and business rates," Andrews admits. "We are talking to the council about this. They will assess for both and check annually to see what the actual use is."

Cardiff Council has taken the pragmatic view that any use raises more taxes than an empty building, which also deters people from starting up businesses next door as well. "They are gathering revenue, that is the main thing, and they are bringing people back to live in the city centre," Andrews says.

Loft-co is benefitting as well, because the market for live/work units is about 30 per cent below that for pure residential units. "We didn't want to do live/work because it depresses values too much," Andrews says.

Chrichton House is a rich 19th century bank building at the heart of the emerging Cardiff Bay area, between Mermaid Quay, the Welsh Assembly and the Millennium Centre for the Arts.

The res/com units will range from 500sq ft to just over 1,000sq ft, and some will also have roof terraces. Work is expected to get under way in October with completion due in March 2005. Prices will start from £160,000 and are being marketed by joint agents Burnett Davies (02920 575544) and Michael Graham Young (02920 465466).

It will be interesting to see how it all works. If res/com succeeds, it could set a welcome trend to flexibility in the planning system in other areas - after all, why should the planners force us to live and work where they direct?