Buying house which is currently HMO

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There is a house for sale near us which is currently an HMO and being sold as such. It has been on the market for a year or so in which time the price has dropped by around £100,000.

The house is www.rightmove.co.uk/properties/104881319#/

I am tempted to ask for details with a view to moving in as a family home (it is a good size and looking at other houses on the road could serve as a 4/5 bed easily with minimal changes).

Looking at Portsmouth planning policy www.portsmouth.gov.uk/services/development-and-planning/planning-applications/planning-houses-in-multiple-occupation/houses-in-multiple-occupation-hmo-database/

it seems we would need a change of use and gte a licence to create an HMO but I'm not sure what happens if we moved in as a family - would it lapse back to class C3 use? Or would we need to do this after we bought the property?

And would it be easy to get a 'normal' mortgage on the house? I know we would need to make sure the house was empty etc but would a high street lender be willing to lend on it?

Any advice gratefully received before we start enquiries!

before you start all that - are the tenants leaving? If they aren't going of their own accord they need to be given six months initial notice, and then possibly evicted which will take another year or more.

It's advertised as tenants in situ. Sounds like a can of worms unless you are in a position to rent while you go through eviction proceedings.

I would guess that three rooms are empty at the moment, as there are three (apparently unoccupied) bedroom photos.

To answer your initial question, you'll have no problem using it as a family home and won't have to apply for change of use, but it will indeed be a nightmare trying to get vacant possession. You'd have to get the landlord to issue Section 21 notices at this point and start the waiting game of trying to get the property back, which the landlord may be unwilling/unable to do as they may not have the resources to cope with the associated costs, and risk that you would walk away from the sale while waiting anyway.

The reason it is cheaper is that you will have a nightmare getting tenants to move out. I know LL often offer them a lump sum to just go. If you have to go through the court route, firstly if they are not in rental arrears it is almost impossible to get a tenant to leave. You don't know what type of tenancy they have. You might be lucky and could use some of the £100k saving to buy them off. I expect the vendor has already tried this. It could be 2 years plus before you get an eviction order and then you might still have to get baliffs' to actually get them out. More trouble than it will be worth.

I believe it would require a full planning application to convert a Sui Generis HMO to C3. If you contact the local Council planning department they should be able to advise.

It’s probably worth checking whether the majority of the other houses on the street and surrounding area are HMOs. Would you want to live on a street where every other house is an HMO? Bear in mind issues like parking.

Would you be willing to go through the process of serving notice on the tenants and making changes to covert back to C3? It can take a long time and be costly, especially if you get a tenant that isn’t willing/able to leave.

The price of an HMO generally reflects its value as an investment (based on rental yield) so have you checked the price of a large property with C3 use in the area? You could pay over the odds plus the cost of obtaining vacant possession and any conversion works.

With 7 percent net yield you will get property developers go for it.

It has tenants in situ and it's being auctioned.

If your mortgage requires empty possession there's no way for you to buy it. It will come with the tenants. There's no legal way to remove them for months.

It's being sold as a very good investment.

I would avoid it like the plague. Getting tenants out isn’t easy and even harder at the moment.

If it was sold with vacant possession you would have no problem but it is being sold with sitting tenants so will be an absolute nightmare! Have you viewed it? Those photos look like they were taken before tenants moved in as there are no personal possessions, you may find the current state of the property is quite different.

With that sort of property I'd be concerned about neighbouring houses being (or later being converted to) HMO too. We lived next door to one for a while and I woudn't do it again. The tenants tended to change every year and whilst some groups of occupants were lovely and quiet others were a PITA. Nothing significant enough to be able to do anything about but coming and going late at night, friends over drinking, smoking and swearing in the garden whenever it was warm, music on in bedrooms that adjoined ours at all times of day and night, mess left in the garden all the time (pizza boxes, bottles, cigarette ends etc). Even when we had a nice lot there, the stress of who would arrive next was awful.

I did this years ago.

I strongly suspect the vendor strong armed the tenants out, in hindsight - the last guy to move out was a crony of hers, & we heard from the NDNs after moving in that he'd racketed up his antisocial behaviour as soon as we exchanged - basically, they'd heard that he did a deal with the landlady that he would make life unpleasant for everyone else & then she'd pay him to leave once he was Last Tenant Standing!

With better tenant protection these days (& especially corona) - you'd have no way of getting the sitting tenants out for probably a year or two.

We also found unpleasant surprises in pretty much every bedroom - I'll spare you the details! - & a few weeks after we moved in, there was a major plumbing incident - turned out someone had wodged quantities of old T-shirts down the toilet, eventually causing the soil pipe to back up with spectacular results.

Oh & then there were the debt collectors. That went on for years.

So no, basically I wouldn't do it again! Bad karma.

You might have problems getting a mortgage for it. There was a question over the house I just bought as planning permission had been sought in the past to turn it into an HMO. But luckily the plans were never followed through. Had it been an HMO my solicitor wouldn't have been able to authorise my mortgage on behalf of Santander.

What is the rest of the street like as usually theres more than one HMO in a street.

I would not touch it

@daisyphase

To answer your initial question, you'll have no problem using it as a family home and won't have to apply for change of use, but it will indeed be a nightmare trying to get vacant possession. You'd have to get the landlord to issue Section 21 notices at this point and start the waiting game of trying to get the property back, which the landlord may be unwilling/unable to do as they may not have the resources to cope with the associated costs, and risk that you would walk away from the sale while waiting anyway.

You will have to apply for planning permission for change of use, it's reducing the housing stock.

Big student area round there. We were 'ok' but still a nightmare on reflection.

Check the neighbouring houses, if the yields are good they will be HMOs for years.
Our student house became a b&b , then a famy home and is now a student house again....

You will need to apply for change of use
As it’s advertised as tenants in situ that means they ain’t leaving, it’s a minimum of 6 months notice with an S21 and if they don’t go on that date it’s over a years backlog to go to court for an eviction. This looks like a non starter OP.