Renting a live/work space in London

With self-employment and flexible working on the increase – thanks to the rise in small businesses and improvements in technology – live/work spaces can offer home-based workers looking to rent in the capital both a practical and economic solution.

But how exactly do they work?

A live/work space does what it says on the tin: it’s a place where you can live and work under the same roof, as the space is designed to incorporate both your professional and personal life.

In the past few years, this trend has really exploded.

The concept behind live/work originated in the 1990s in Hackney, east London, where the local authority wanted to encourage the regeneration of industrial spaces – and the growth of small businesses.

Originally edgy and urban-cool, the idea has gradually become more popular and mainstream. Developers have jumped on the bandwagon and begun the regeneration of more and more previously commercial premises into live/work spaces.

A live/work space is defined as a property that is specifically designed for dual use – combining both residential and employment space. It falls outside being either commercial or residential, and is regarded as ‘sui generis’ – ‘in a class of its own'.

Live/work spaces in London are commonly found in areas such as Hackney, Shoreditch, Haggerston, Tottenham Marshes, along Regents Canal, London Bridge and Borough, Clapton, Forest Hill and Peckham.

Hackney and east London are now highly desirable spaces can be expensive, pushing London live/ work renters out into less central parts of the capital.

While many live/work units are the result of an existing non-residential building – such as a warehouse or space under railway arches – undergoing a conversion, they are also now built specifically for the purpose.

Hackney was, in fact, one of the first London boroughs to permit developers to build new flats within this hybrid planning class. 

Usually a private landlord or company, just as if you were renting a standard rental property in London.

Typically, when renting a live/work space you will fall under an Assured Shorthold Tenancy (AST) agreement. It's the most common type of tenancy if you rent from a private landlord or letting agent.

That said, some ASTs may have a clause written into them – or may be slightly modified, so be sure to read the Ts and Cs.

If a work/live space does not fall under an AST, it may be a Non-Housing Act Commercial Lease. This, for example, would apply to a property being let by a company that may have employees staying there from time to time.

The tenancy for a live/work space is just the same as it would be for a standard AST, and will vary from one AST to the next. Most however, will run for a period of six or 12 months, and will have a clear start and end date.

The costs involved with a live/work space will entirely depend on the property you are looking to rent, but generally speaking, should be on a par with a comparable residential rental property.

That said, the price you pay will depend on how big the work/space unit is and where it is located – you’ll pay more of course for a big space in a desirable area.

Also note that live/work spaces are in very high demand from creative industries, so this can push up the price for some properties.

Equally, with a live/work unit, you don’t have to pay for rent, utility bills and other outgoings for two properties, meaning you save money there too.

When renting a live/work space you should be able to write off certain expenses – such as power and water – which will reduce your tax burden. But you will need prove this is used by the ‘work’ part of your property.

You will pay council tax for the living portion of the property, and separately, with some live/work spaces, you may have to pay business rates for your work space – which are typically higher.

This is usually the case if a live/work space has a clearly defined area in the lease that is ‘designated’ for business use – and accounts for more than 50% of the total property size.

This might apply, for example, to a street-facing property that occasionally opens to the public, such as a gallery or event space.

Note, however, a live/work space is unlikely to be subject to business rates if the council has classified the property entirely a 'residence', despite also being used for business.

Similarly, if a live/work property has been classified as 'undesignated' in its lease, this usually means the property is not subject to business rates.

But be sure to check this with the relevant local authority.

As with most rental properties, you should take care of your own home contents insurance for your living accommodation; buildings insurance is usually taken care of by the landlord.

In addition, you may want to consider business insurance.

You may want this if, say, you have access to a shared workspace and would like to protect any equipment there. You could use this cover to protect your IT and other kit.

Equally, this type of cover may also include other elements of cover – such as employer’s liability and professional indemnity insurance – would could be useful.

This is designed to protect employees who enter your home – as well as yourself – should an accident occur.

While there may not be policies specifically tailored to protecting yourself and your belongings in live/work accommodation, you should research the best combination of cover for your circumstances to ensure you are adequately protected. 

Generally speaking, most live/work spaces are a ‘B1 defined workspace’ – meaning units will be used for office or studio type use.

That said, sometimes spaces may be used in other ways, such as for light manufacturing.

It’s worth noting, though, that you can’t operate a shop or a restaurant from a live/work space, as you would need different planning consent.

Generally speaking, people in live/work spaces might have the odd client coming in, but not necessarily a steady stream of customers.

Bear in mind also that it may be hard to operate a business which requires heavy manufacturing equipment or machinery.

The key is to check with the lease and also with local planning regulations, as rules can vary from one borough to the next.

While live/work units were once the preserve of artists and designers searching for large, versatile, cheap spaces,  they are increasingly attracting professionals from a wider range of business fields.

These include media, IT, clerical and comms, consultancies, agencies – as well as personal trainers, photographers, jewellery makers and interior specialists.

In short, with a bit of scouting around, you should be able to find a unit that suits your needs – no matter whether you need to hold meetings, welcome clients, carry out manufacturing – or run a personal training service with all gym equipment on-site.

For many,live/work has proved a rewarding lifestyle choice.

• There’s no commute to contend with, meaning you can start work as soon as you’ve jumped out of bed – and no commuting costs to budget for

• You have the option of working both evenings and late into the night – meaning you can enjoy a more flexible work schedule

• You may benefit from a community of like-minded people, while also having your own space 

• With the property almost always occupied, you reduce the risk of break-in.

But while all this may sound tempting, before rushing to sign on the dotted line, you need to give some thought to the realities of renting a live/work space.

• It may be hard to switch off once your working day is done – so you need to be disciplined

• Equally, it might also be hard to stay motivated without a fixed timetable

• You may miss having colleagues around, and feel trapped at times – so it’s important to find somewhere you can get out and about for a change of scene.

1. Know your landlord’s rules for your particular workspace – and check you are happy with these before signing the lease agreement

2. If you work with other people, find a live/work unit where the workspace can be accessed by others without them having to traipse through your bedroom

3. Speak to your potential neighbours

4. Be mindful of the fact that live/work is a relatively new concept, and that some of the legal issues are not concrete

5. Only opt for a live/work space if you genuinely work from home. If you are using a work/space entirely as a residential space, you could run into difficulties as you could be in breach of planning regulations – and the law.

For more information on London live/work spaces, try the Live/Work Network.

Also:

• Urban Spaces, an expert in live/work spaces in London

• London Live Work, an east end company specialising in live/work units, live/work spaces, artist studios and other live/work accommodation to rent

• London Warehouses, a firm which specialises in converted warehouse rentals in London, including live/work spaces.

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