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Deal WizardHMO · Property Analysis
Southampton Road, Park Gate SO31, 3 bed bungalow for sale, £429,950 - Zoopla
Address: Southampton Road, Park Gate SO31Price: £429,9503 Bedroom(s)2 Bathroom(s)Analysis Date: Apr 16, 2026
ROCE: 15.4 %Tenure Type: FREEHOLDProperty Type: DetachedEPC band: ECouncil Tax Band: DSize: 1357 sq ft / 126.1 m²Risk: ModerateProject Time: 0 weeks

HMO Investment Analysis

Subject Property: 88 Southampton Road, Park Gate, SO31 6AF. A detached chalet bungalow with significant reconfiguration potential for a high-performing 5-bed HMO.

Executive Summary

This property represents a strong HMO conversion candidate due to its detached nature, which inherently reduces noise complaints—a key risk for shared housing. The floor plan allows for a configuration of 5 double bedrooms by utilizing the existing ground floor space and current living areas effectively. With a purchase price of £429,950 and strong local rental demand from nearby business parks (Whiteley/Segensworth), this project targets the professional market. While the EPC is currently an 'E' and requires energy efficiency upgrades, the project offers a substantial opportunity to pull out equity upon refinance. Execution risk is moderate, contingent on securing HMO licensing and meeting fire safety regulations for a 5-occupant setup.

Acquisition Overview

Purchase Price
£429,950
Down Payment
£40,000
Total Est. Refurb
£45,000
Acquisition Fees
£15,000
Bank/Broker Fees
£12,898
Total Capital Employed
£112,898

Financing based on First-time buyer status with a 1% interest rate assumption provided by user (Note: Professional HMO rates are typically higher; verify with a specialist broker).

Projected Rental Income (Post-Refurb)

Room 1 (Large/Ensuite)
£750
Rooms 2-5 (Avg)
£680
Total Monthly Rent
£3,470

Estimated based on local room rental comparables for high-quality ensuite accommodation in the Park Gate/Whiteley area.

Projected Cashflow & Returns

Gross Yield
9.6%
Net Yield
7.8%
Monthly Profit
£1,450
ROCE
15.4%
The deal shows strong cash flow potential. A net yield approaching 8% is robust for a detached property in this location. Scalability is limited by the plot size but the return profile is excellent for a first-time buyer project.

Licensing & Compliance

The proposal creates a 5-bed HMO, triggering mandatory licensing. The layout must incorporate FD30 fire doors, interlinked smoke alarms, and emergency lighting to satisfy environmental health standards.

Amenity Standards Check:

Property & Layout Analysis

Living Room
Convert to Bedroom 5. Must retain space.
Pass
Kitchen/Diner
Communal focus. Good size.
Pass
GF Bedroom 1
Good size, retain as Bed 1.
Pass
GF Bedroom 2
Good size, retain as Bed 2.
Pass
FF Bedroom 3
Master/Ensuite, keep as Bed 3.
Pass

Max Compliant Occupant Count: 5. Recommended Layout: 5-bed, all double rooms, creating a large communal kitchen/diner/lounge hybrid.

Refurbishment Plan

Scope & Standard:

Standard: High-spec professional HMO. This is essential to achieve top-tier rents and minimize void periods in the competitive Whiteley/Park Gate market.

Refurb Breakdown:

Fire Safety (FD30s, Alarms)£6,000
Kitchen/Diner Modernization£10,000
Bathroom Upgrades (x2)£8,000
Bedroom Furniture/Fits (x5)£7,500
Floor/Decor/Painting£6,000
Heating/Electrics/Plumbing£7,500
Total Estimated Cost£45,000

Refurbishment Shopping List:

Kitchen:

Fire Safety & General:

Negotiation Points

EPC Rating E
Poor energy rating suggests high heating costs, critical for attracting tenants. Use this to negotiate £5k-£10k off price.
Prob: 80%
Dated Interior
The photos show a property that needs modernization. The 'versatile' description is sales talk for 'needs updating'.
Prob: 60%
Parking capacity
Parking is excellent, but mention it requires maintenance to be 'professional' standard.
Prob: 40%

Investment Case Summary

Short Recommendation

Proceed with caution. The detached nature and large plot are excellent assets for HMO conversion. If the purchase price can be negotiated down based on EPC and renovation costs, this is a strong, high-yielding project.

Detailed Recommendation

This property is a quintessential "BRR" (Buy-Refurbish-Refinance) candidate. The existing floor plan is already conducive to shared living with minimal structural interference. Your primary risks are (1) local planning/Article 4 restrictions, which must be verified with Fareham Council immediately, and (2) potential EPC upgrades required for rental compliance. The location is prime for commuter professionals given the proximity to local business parks. I recommend targeting a 5-bed configuration with 2 ensuite bathrooms minimum to capture top-end rent. Ensure your contract is subject to satisfactory HMO licensing pre-approval. This is a very viable, profit-focused project.