Executive Summary
The property at Marlborough Close is a 3-bedroom end-terrace house. Pragmatically, this is NOT a high-yield HMO candidate for 5+ occupants as it lacks sufficient legal bedroom space. However, it is a strong candidate for a high-end 2-bed professional shared house (co-living) by converting the living/dining area, or a standard BTL. Given the current configuration, we have analyzed this as a 2-bed professional share, as the 3rd bedroom fails national minimum size standards for an adult (4.69m²). Adding value requires a layout pivot. This project is recommended for experienced investors looking for long-term hold in a solid rental market.
Acquisition Overview
Investment assumes First-time buyer status.
Projected Rental Income (Post-Refurb)
Due to the small size of the 3rd room (4.69m²), it is excluded from HMO bedroom counts, limiting the model to a 2-bed professional share.
Projected Cashflow & Returns
Calculated using 2-bed rental yield. A 5-bed model is not viable without structural extension.
Licensing & Compliance
- Mandatory Licence: No (Occupants < 5)
- Additional/Selective Licence: Check St Ives/Huntingdon Council selective licensing (often applies to 3+ households).
The property currently supports 2 adult occupants for HMO purposes. Bedroom 3 is legally too small for an adult HMO room.
Amenity Standards Check:
- Occupants Supported: 2
- Kitchens: Adequate
- Bathrooms/WCs: Adequate
- Communal Space: Adequate
Property & Layout Analysis
Capacity & Layout Options:
Option 1
2-Bed Professional Share
ViableOption 2
3-Bed HMO
Failed SizeRefurbishment Plan
Refurb Breakdown:
Full Property Repaint2500
Kitchen Refurb/Worktops3500
New Flooring (LVT/Carpet)2000
Bathroom Refresh1500
Fire Safety (Doors/Alarms)1800
Plumbing & Heating Check1000
Electrical EICR & Remedials1200
Furniture Packages x21500
Garden Clearance & Shed1000
Cleaning & Staging500
Contingency2500
Total19000
Refurbishment Timeline:
Weeks: 6 || Months: 1.5
Phase 1: Strip out & Safety || 1 week
Phase 2: Kitchen & Bathroom || 2 weeks
Phase 3: Decorating & Flooring || 2 weeks
Phase 4: Furnishing & Snagging || 1 week
Risk Level
Risk Level: 45/100 (Moderate). The risk lies in the limited capacity. The property cannot be pushed to a 5-bed HMO without significant structural work which may not yield ROCE. It is a solid BTL/small share project.
Risks & Assumptions
- HMO Planning: Cannot convert to high-yield 5-bed HMO without extension.
- Licensing: Ensure Selective Licensing compliance for 2 unrelated sharers if required.
- Market: St Ives is a solid commuter town but rental rates for large rooms are capped compared to Cambridge center.
Negotiation Points
Dated Kitchen & Bathroom
The orange/yellow tiling and kitchen unit age will require full replacement for professional lets. Price down potential: £10,000. Prob: 85/99.
Bedroom 3 Size
The 3rd bedroom is physically too small for legal bedroom standards. This drastically impacts the investment potential vs advertised '3-bed' price. Price down potential: £15,000. Prob: 70/99.
Garden Condition
Shed/fence in poor repair. Price down potential: £2,000. Prob: 90/99.
Investment Case Summary
Short Recommendation
Offer £235k-£240k. Focus on high-end professional 2-bed shared house. Avoid trying to squeeze 5 people in.
Detailed Recommendation
The purchase price of £260k is high for a property that is effectively a 2-bed, as the 3rd bedroom is too small to be classified as a bedroom for HMO or compliant professional letting. I recommend a firm offer of £235k based on the "2-bed" effective capacity. Use the money saved to bring the finish to a "Grade A" standard to attract high-paying professionals working in Cambridge/Huntingdon. This is a low-risk, steady cash flow project if managed correctly.
HMO · Property Analysis