Is an HMO worth less to sell?

[Mr Landlord]

Three houses with 4 floors side by side, one is let out as rooms/studios (HMO), the other has been converted into flats, the third has remained a single dwelling family home. Camden council, yes them again. state that they
'' discourage the reversion of an HMO to a single family dwelling or conversion to self contained flats ''.
On the open market is the HMO worth less as a building to an investor due to the fact that it has been registered and has a licence as an HMO than the other two? If it is then surely it is unfair that a council will obstruct and make it difficult for the owner of the HMO to realise the full market value of their property. Your comments?

[Worldlife]

Seems that you may have already found the answers to two of the three valuations you are asking for and only need to consult local estate agents and local or other advertisements to get the price for the third.

The Planning Department obviously have a policy to ensure that the property mix within their area meets the social needs of the district.

Others may know if that policy is soundly based on Government policy or directives. If it is then you won't stand much of a chance on a Planning Appeal.

Looks like there may not be an opportunity for a quick profit (in the Camden area!) of converting HMO's to flats or single dwellings!

Market forces will obviously come into play and landlords will decide whether or not they can get sufficient return on investment for HMO's in Camden. If they cannot then existing owners wishing to opt out of the HMO market may have to lower their prices - especially if expensive work is needed to comply with new legislation.

The value of the HMO to a landlord will also be affected by the landlord's investment programme - ie is he is satisfied with the regular income and potential long term property value growth or is into speculative property purchase and selling and merely using the rental income as a transitional part of that process.

Wonder if lowering of HMO property prices may give an opportunity for social housing organisations to enter this market and offer more affordable rents? Could that be a hidden part of the agenda?

[Mr Landlord]

For your detailed reply Vic.
Though I was not after a valuation, the house has been in my family since 1959 and I inherited it 4 years ago, my concerns are that if I do decide to sell in the future will it be worth substantially less, ie: tens of thousands less than the other two examples. I have no objection to raising standards of habitation and safety, but to be restricted from opting out of an HMO requirement is unfair.

[SteveP]

but to be restricted from opting out of an HMO requirement is unfair.

No more unfair than any other restrictions imposed by the planning system. The planning system has numerous functions and one of them is to ensure that there is adequate housing provision. Your predecessors in title were allowed to convert the house and no doubt profited from it. Swings and roundabouts.

In any event you won't know whether you will get consent for a change os use until you apply for it. If you want to do that I'd suggest that you engage a Chartered Twon Planner to advise you.