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Originally featured in HMO Magazine, Issue 25 (Aug/Sept 2020)
In property investment circles, there’s often a misconception that any HMO property can automatically be valued at a commercial rate, regardless of size or location. However, this is not the case. To achieve a commercial valuation, there is typically a planning hurdle to overcome. For instance, properties in areas with an Article 4 direction or those requiring permission for a large sui generis HMO (7+ tenants) are common examples.
But there’s another approach to unlocking a commercial valuation—through hybrid planning strategies that incorporate mixed-use elements into HMO projects. By introducing a commercial space within the property, you can push the valuation based on turnover, rather than just the bricks and mortar.
This strategy works particularly well when combining permitted development (PD) rights with a conversion of offices or shops to residential space, and further converting that space into an HMO or co-living property.
In this blog post, I’ll walk you through a real-life case study where I used PD rights to turn an underperforming commercial unit and flat above it into a thriving, beautiful four-bedroom HMO with an attached commercial unit.
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