8 bedroom HMO – Darwen

20 bank street Darwen

This HMO is within an article 4  area, which gives the council the power to restrict the quantity of HMOs. This makes applying for a new HMO planning permission virtually impossible, but on the other hand if you have a HMO within this area there is very little competition. In the past 20 years nearly all HMO planning applications had been  declined (including ours 2 years earlier – 47 Bonsall St.).

However, as 20 bank street was already a C4 HMO (<7 tenants) and we planned to significantly improve the poor quality of accommodation, we were granted permission to change increase the occupancy, from C4 HMO to ‘sui generis’ HMO (7+ tenants). The property is 205m2 with good-sized bedrooms. We now have 8 large bedrooms, 3 of which are adequate for double occupancy. This property can now potentially house up to 11 people.

We carried out extensive renovation works to create a desirable shared living home environment with 8 bedrooms, 3 bathrooms, lounge, kitchen and dining room. All rooms are furnished to a high standard making our tenants extremely happy with their new home.

Purchase & refurbishment costs

Purchase price£134,000
Refurbishment cost£80,000
Solicitor's fees£1,150
Planning consultant & planning application fee£2,100
Stamp duty£4,200
Bridging finance cost & valuation fee (8 months)£6,350


Property valuation£250,000
Mortgage loan @80% LTV£187,500
Mortgage payment (interest only/PCM)£833
Rent (PCM)£3,315
Lettings management - 12% (PCM)£398
Operating expenses£600

ROI & Yield

Money left in£40,300
Cashflow (PA) £17,844
Return on investment (PA)44%
Gross Yield14.1%
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