Come Home to Bedsit Land

A clampdown on rogue landlords could mean a bright future for dismal and grungy shared houses

Close to transport links and spacious, although probably a bit grotty, houses divided into bedsits are the ideal home or development project for many people. More such properties are likely to become available over the next few months as councils endeavour to improve the lot of those living in houses in multiple occupation (HMOs) and landlords, who would rather not refurbish, sell. Since 2006 local authorities have been obliged to regulate shared houses and bedsits but have only recently done so with full vigour.

In Oxford, a city in which an estimated one in five residents lives in a bedsit or a shared house, the council has announced a rolling scheme to regulate all HMOs.

Ian Wright, the council health development service manager, says that some rogue landlords are simply leaving a room or two unlet to escape regulation — the compulsory scheme applies only to houses with five or more tenants — while many smaller properties are in equal need of supervision. Under the regulations not only will landlords need to pay annual fees, they will also have to upgrade run-down properties.

Wright says that some landlords are simply taking the expense on the chin but others are saying that they will sell.

Peter Beddoe, of Morgan Beddoe, the Bristol-based auctioneers and estate agents, agrees that many bedsit landlords are choosing to sell in the face of tighter legislation. Properties are being registered or emptied and sold, he says. “Once a bedsit has been emptied landlords will be anxious to sell swiftly. Council tax payments revert to the landlord after three months so they will want to move them on.”One example of this trend is a house divided into eight bedsits in Redland, a leafy Bristol suburb, that was recently sold by Beddoe for £384,000. In good order the house would have been worth about £450,000, so there would have been a decent margin for the buyer.

Chris Coleman Smith, a Savills auctioneer, also believes that a good profit can be had by converting a bedsit back into a house. “We sold a large period terraced house in Notting Hill in our last auction for about £1.7 million. As a single house, refurbished at a cost of, say, £500,000, it would be worth about £3 million.”

However, Ed Mead, director of Douglas & Gordon, the estate agent, believes that the boom in demand for small rental units means that private buyers will need to work hard to outbid investors and landlords. He advises “have-a-go family developers” to find out what the refurbished property would be worth and make sure that the cost of buying it and renovating it does not exceed the market value. Converting a bedsit paid off for Lisa Raynes and Adam Vellins who spent £35,000 converting a bedsit into their family home, see panel right.

Without the benefit of a rising market, small-scale developers cannot rely on price rises to make their project stack up financially.

James Butler, of the Royal Town Planning Institute, says that there is generally no need for planning permission to change the use of a property from bedsits to a family home — it can be done through permitted development rights.

But some councils — the Royal Borough of Kensington and Chelsea being a prime example — have repealed this right and insist that owners apply for consent. Then it is almost certain to refuse permission on the basis that the borough needs low-cost rental accommodation. So it is essential to check with your local authority before making a purchase.

Meanwhile, Mead also raises the issue of location. Although bedsits are often hewn from good, big period houses in central locations, it is important to research the neighbourhood.

Source- Thetimes.co.uk