The number of agricultural to residential conversions in the UK has dropped from 574 in the third quarter (Q3) of 2016 to just 377 in the first quarter (Q1) of 2017, according to Lendy.
Lendy, the leading peer-to-peer secured lending platform, says that the supply of new housing in the countryside is being cut due to the lack of funding for housing developers.
The redevelopment of agricultural buildings to residential buildings has been seen as an opportunity to close the housing gap – an issue which is just as crucial in the countryside as it is in the cities.
Liam Brooke, director and co-founder of Lendy, said: “Farmers have a chance to really make the most of their surplus buildings. And conversions are a good way for farmers to diversify their income.”
“However, the drop in the number of barn conversions indicates that developers are lacking access to funds to commence with these kinds of projects.”
Developers are eager to convert outbuildings – such as barns and stables – into housing, as this can help to tackle to the UK’s chronic shortage of rural housing. By doing so, demands can be met, effectively closing the housing gap. However, access to funding remains an obstacle.
Farmers are also at risk of having their finances challenged when subsidies are reviewed following Brexit. If subsidies are withdrawn from farmers, converting unused agricultural buildings could be an effective way to supplement their income.
“The housing shortage is just as critical in both rural and urban areas, and developers are keen to ramp up activity in these areas,” Brooke added. “However, a lack of funding means they are finding it difficult to get projects to get off the ground.”
He continued: “More must be done to help developers start these projects. Alternative finance providers, such as peer-to-peer lending, are increasingly stepping in to fund these activities and help meet demand.”