Loft conversions for HMOs- a helpful guide for Nottingham developers…
If you have an eye on a property that you think will make a great HMO but you don’t know how beneficial adding a loft dormer will be, it’s worth reading our simple guide to HMO developers and investors…
Most loft dormer conversions come under PD (Permitted Development). What are Permitted Development rights? You can read more on our blog about PD for HMOs here.
The permitted development loft conversion process is fairly straightforward.
Loft conversions fall into your permitted development rights if they follow these conditions:
- A volume allowance of 40 cubic metres additional roof space for terraced houses*
- A volume allowance of 50 cubic metres additional roof space for detached and semi-detached houses*
- No extension beyond the plane of the existing roof slope of the principal elevation that fronts the highway
- No extension to be higher than the highest part of the roof
- Materials to be similar in appearance to the existing house
- No verandas, balconies or raised platforms
- Side-facing windows to be obscure-glazed; any opening to be 1.7m above the floor
- Roof extensions, apart from hip to gable ones, to be set back, as far as practicable, at least 20cm from the original eaves
- The roof enlargement cannot overhang the outer face of the wall of the original house.
However, a successful conversion can pay massive dividends and set you up for increased loan success based on the room rental yield.
Main benefits of loft conversions for HMOs
So why would a HMO developer like yourself want to do a loft conversion?
As investors, we always like to think of “Return On Investment (ROI)”.
Depending on the area, an HMO loft conversion could be expensive, not to mention complicated.
Here are some reasons why you should consider an HMO Loft Conversion:
Increase your rental income
The reason you’re an HMO investor is that you’re looking to provide quality housing to people. But you also need to make a return on your investment.
A loft conversion is an incredible way to increase your rental income.
A quality loft conversion can work as a fully functional bedroom and add up to 30% more rental income to your property.
This is a significant way to boost monthly cash flow and get a massive return on your investment.
Depending on the size of your loft you could even fit more than 1 bedroom. Some of our HMO conversions have included two rooms with en-suites.
Imagine that, what could 2 extra bedrooms mean for your HMO and monthly rental income?
Increased commercial valuation
Getting a commercial valuation instead of a traditional brick and mortar valuation is like skyrocketing your potential as an HMO investor.
The increased valuation means you’ll get to pull more money out of each deal.
This means you can buy more HMOs and provide more quality housing.
Commercial valuations for HMOs are based on
- Number of bedrooms
- Number of ensuites
Viewed as an income-generating asset, lenders want to know how much income can the property generate.
Smart Utilities
Providing heating, electricity, water and fibre optic to your tenants in a HMO can come at some expense but the larger number of tenants covers these costs. By adding more people by converting the loft you’re maximising resources for the property.
Additionally, by re-roofing you are bound to increase the thermal properties of new roof work therefore increased U-value and insulation will bring down your utility costs for heating in the long run.
Go back-to-brick and re-roof the rafters
Everyone is worried if their roof needs work. Are there just a few loose tiles, expoed facias or is there more structural work lurking between the rafters?
You will need an experienced roofer to come and take a look. But I imagine you won’t want to spend tens of thousands of pounds on the renovation works below to be called back for water damage and roof repair work down the line?
No, I didn’t think you would. Most developers want to do a quailty job from the offset which will save you money in maintenance in the long run.
By considering renovation work to your top floor and loft, you could be investing in more than just adding rooms. You are ensuring the whole property is fit for purpose for years to come.
If you are planning on doing structural work and a back-to-brick renovation, then it is an ideal time to consider a loft conversion. Once you have removed and replaced the rafters and coverings, you simply need to create new dormer frames and re-cover.
Not only will you increase the energy efficiency of your new loft dormer but you will have completed major upgrades while the rest of the house is empty.
If you would like to know more about how we help HMO developers and would like to visit one of our HMO sites in Nottingham and Derby then please get in touch.