HMO · Property AnalysisAnalysis of a 2-bedroom property in Lee High Road, with high-growth potential via C3 to C4 conversion, contingent on leasehold approval.
This property offers a compelling HMO conversion play in the SE13 area. By reconfiguring the spacious reception room (18.5m²) into a third bedroom, this property can transition from a 2-bed apartment to a 3-bed HMO. Rental demand in the Lewisham area is exceptionally strong, supported by excellent connectivity to Canary Wharf and London Bridge. However, investors must be aware that as this is a **leasehold** property, freeholder permission for an HMO conversion is the critical path to success. The financial metrics are robust, assuming a modest refurb budget and efficient management.
Analysis based on First-time buyer status with a £40,000 deposit.
Based on comparable evidence in SE13 where modern shared housing achieves between £750-£1000 per room.
Status: The property is currently compliant but requires local council verification for HMO licensing triggers for 3-person households.
Weeks: 6 || Months: 1.5
Leasehold Structure (Crucial)
The property is a leasehold apartment. We must verify if the freeholder prohibits commercial use/HMO letting. Price down potential: 40/99.
Kitchen Size
The current kitchen is compact (6.4m²). This limits tenant attraction. Potential reduction in offer to account for structural kitchen expansion costs. Price down potential: 25/99.
Go, but with caution. The numbers work excellently for a 3-bed HMO, but the leasehold status is the "make or break." Conduct a strict review of the lease contract before spending capital.
This is a high-yield opportunity. The property is currently undervalued for its potential use as a 3-bedroom HMO. The key to this investment is the "Conversion Strategy." By re-purposing the large 18.5m² reception area into a third bedroom, you increase revenue by 50% compared to a traditional 2-bed rental. Warning: As a leasehold property, you must confirm your right to sublet under an HMO model. The freeholder may view this as a breach of usage terms. If the lease allows it, this deal is a winner with a predicted ROCE of 33.9%. Budget for high-quality fire safety to avoid council enforcement issues, which are common in Lewisham. If you can negotiate £10k off for the kitchen layout concerns, your ROCE will improve significantly.