What you must know before converting a house into flats: The pros, the cons and the hows (is planning permission necessary?)

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The transformation of houses into flats is, in many respects, a complex endeavour and undeniably a forward-thinking strategy, brimming with financial promise. What gives this investment option such potential? Well, this is a savvy move that can not only boost your income sources but enhance the overall value of your property. Making things even more interesting, a new consultation could turn the lengthy planning permission for these developments into a thing of the past.



The concept of converting houses into flats stands out as a strategic move with compelling financial benefits. Let’s delve into why this approach is becoming increasingly popular among seasoned and new property investors.

Financial Advantages of Splitting Houses into Flats

Essentially, subdividing a single house into multiple flats transforms one source of income into several, often yielding higher total rent when compared to other rental alternatives. Moreover, there is an appreciation potential for the property.

Magnified Income and Value

The bottom line for property investors converting a house into flats lies in creating multiple income streams from a single investment. This shift from a single income source, typical of a family home, to diverse revenue channels from individual flats marks a significant leap in potential earnings.

A distinctive advantage here is the ability to access higher overall rental income. In simple terms, each flat can be rented separately, often yielding higher total rent than a single let dwelling. As a landlord, this means you can capitalise on your investment more effectively, tapping into the diverse rental needs of different tenants.

But the financial benefits don’t stop at increased overall rental income. There’s a ripple effect that enhances the property’s resale or refinancing value. For instance, you can diversify the use of the property to cater to a broader audience, which increases the appeal in the real estate market; in turn, this can lead to a significant property value appreciation, offering a robust return on investment over time.

Market Trends: The Demand for Flats

The demand for flats, especially in urban areas, is consistently strong as they create an affordable and convenient housing option. What’s more, well situated and high-quality flats typically enjoy lower vacancy rates.

What Tenants Want

The housing preferences from modern urban dwellers play a pivotal role in shaping the rental market. Flats in urban areas have a magnetic appeal, especially to diverse groups like students seeking proximity to universities, young professionals prioritising work locations, and small families looking for affordable living solutions in well-connected areas.

By transforming a house into well-furnished flats, landlords are positioned to meet this steady demand. Likewise, quality flats in prime locations are like magnets for reliable tenants. The implication is not just about filling spaces; it’s about attracting tenants who value their living space and, as a result, tend to stay longer, leading to lower vacancy rates. This steady tenant occupancy translates into consistent rental income, stabilising the investment and reducing the financial uncertainty that often comes with property rental.

In short, splitting a house into flats is not just a renovation project; it’s a strategic investment move. It’s about understanding and responding to market needs, unlocking the potential of a single property, and setting the stage for financial success. However, it requires careful planning and adherence to various regulations and standards. With thoughtful planning and execution, this approach can be a game-changer in your property investment journey.

Moreover, undertaking the conversion of such nature requires skilled navigation through the legal landscape, mainly focusing on planning permission and adherence to building regulations. But don’t write off your renovation projects just yet, as signs of significant changes could steer the conversion of single houses into flats under Permitted Development Rights (PD Rights).


The UK government has introduced an intriguing proposal in the recent Autumn statement. This plan, scheduled for a 2024 roll-out, involves a consultation on a new PD Right, carrying the potential to bring about changes in the housing landscape.

Under the proposed changes, homeowners will have the opportunity to convert a single house into two separate flats without needing full planning permission. If approved, this reform will simplify the process of creating additional living spaces within the existing residential structures, provided the exterior appearance of the house remains unchanged. It’s a strategic move to increase housing availability without altering the external character of neighbourhoods. Key details of this proposal include:

  1. Scope and Implementation: The new PD Right focuses on allowing the subdivision of houses into two flats. Following the consultation process in the early part of the year, these changes could be implemented in 2024.
  2. Potential Restrictions: While the details will be clearer post-consultation, certain restrictions are expected. These may involve limitations on listed buildings and properties within conservation areas and requirements such as space standards for each dwelling. Additionally, the process might call for a prior approval application.
  3. Benefits: This proposal is a step towards addressing housing shortages by jazzing up existing structures. If approved, the move offers homeowners the flexibility to adapt their properties to changing needs, while potentially increasing housing options in urban and suburban areas. For investors, the potential for higher rental income, return on investment, plus less reliance on single income sources are front of mind.
  4. Timeline: Changes are speculated for late summer 2024, final timelines must wait until post-consultation.
  5. Additional Consultations: The government is also considering relaxing restrictions on installing Air Source Heat Pumps near property boundaries —a positive stride for those eyeing sustainable property investments.

If these proposed changes materialise, they’ll spark a significant shift in the UK’s urban planning and housing approach. They are seen as a leap toward flexibility, adaptability, and alignment with current housing needs and sustainability goals. But, until such time, we’ll have to focus on the current way forward to transform a house into flats, so let’s do that.


The existing legislation to split a house into flats means that you must adhere to strict building and fire safety regulations. This includes ensuring the conversion meets planning permissions and change of use requirements.

Subdividing a house into flats is regarded as “material change of use,” and as such, it’s subject to the stipulations outlined in Building Regulations. These requirements involve various factors, including escape and fire safety, hygiene standards, sound insulation, energy conservation measures, and contaminants considerations. Compliance with these regulations is essential to ensure the conversion meets safety, health, and environmental standards.


Transforming a house into flats is more than a physical alteration and not less than a deep dive into legal requirements and regulations. It requires a thorough grasp of the UK’s planning framework and a strategic approach, which is why teams with property development professionals carry out the most effective projects.

Gaining Planning Permission

When full planning permission is required, prepare for a detailed application process. This includes submitting architectural plans that showcase how your conversion aligns with local planning policies and possibly dealing with challenges such as objections from neighbours. These plans must address everything from aesthetic considerations to building safety standards.

So, you want to become familiar with technical and your council policies –knowing these in advance will also help you assess if your property will meet the criteria for conversion:

Building Regulations

  • Subdivided buildings must meet standards as outlined in the Housing Act 2004
  • Whether it’s a new build or changes to existing structures, Building Regulations This includes residential, commercial, and industrial use, and remember –compliance is the law

Original Floorspace Requirement

  • Many councils have a minimum dwelling size requirement for properties eligible for conversion
  • This assessment considers the actual floor area as when it was initially built. Any extensions added later are not considered for this criterion

Minimum Housing Standards

  • New developments must comply with national space standards, which dictate minimum sizes for homes, including bedroom dimensions, storage, and ceiling heights
  • These space standards also specify the maximum number of occupants to ensure adequate living conditions

Council Policies on Family Dwellings

  • Councils often require a mix of flat sizes to include family dwellings
  • Developers and investors eying these types of conversions should be aware of the local council’s regulations and their stance on the loss of family homes in favour of smaller units

The legal framework here is designed to ensure that any conversion is safe, habitable, and meets the community standards. Navigating this framework means ensuring your conversion project aligns with planning permissions and adheres to the specific change of use requirements. This is critical as you’re altering the building’s original purpose from a single household dwelling to multiple individual units. Each step, from structural changes to fire escape routes, must be meticulously planned and executed in compliance with these regulations.

Landlords, here’s a crucial tip if you have financed your property investment –before you embark on transforming your property into flats, make sure to get a nod from your lender. Why? Well, when they gave the green light for your mortgage, it was based on your property being a single dwelling. Any changes? You need their approval to keep everything in sync and to protect your investment from heavy losses. Due diligence is vital, and here is a great source to explore the mortgage scenario further.


Converting a house into flats is not just a legal exercise but also an architectural one, blending creativity with practicality.

Assessing Feasibility: Not all houses are suitable for conversion into flats. It’s vital to evaluate the structural integrity of the building and determine whether it can feasibly be divided into separate units.

Design Efficiency: Efficient floor plans are essential in maximising space while ensuring compliance with safety regulations. This involves smart design to optimise living areas and ensure each flat is self-contained and functional. You can easily avoid common design mistakes by checking out our guide

Renovation Techniques: Aim for cost-effective renovation techniques that enhance the property’s value without incurring excessive costs. To achieve your goal, you’ll want to consider energy efficiency and the use of sustainable materials.


Embarking on a project to convert a house into flats is as much a financial undertaking as a construction and design one. It requires a keen eye for cost estimates and a robust approach to budgeting.

Conversion Costs: The cost to convert a house into flats varies widely. Factors influencing the cost include the property’s size, current condition, and the standard of the planned refurbishment. Are you aiming for a high-end finish with top-of-the-line fixtures and fittings, or are you planning a more modest refurbishment? The choice here will significantly impact the overall cost.

Accurate Budgeting: Develop a budget that accounts for all potential costs, including construction, professional fees, and other expenses. Proper budgeting is essential to ensure the project’s financial viability.

Start by listing all known costs –including construction expenses, fees for architects and other professionals, planning and application fees, and the cost of complying with building regulations. Don’t forget to factor in the cost of any necessary surveys or inspections.

An often-overlooked aspect of budgeting is preparing for the unforeseen. It’s prudent to allocate a contingency fund to cover unexpected expenses or complications that might arise during the conversion process –a rule of thumb is to set this bracket around 10-20% of the total budget.

Remember, accurate budgeting is not a one-time task but a continuous process. Regularly review and adjust your budget as the project progresses. This dynamic approach allows you to manage your finances effectively and make informed decisions, ultimately ensuring the financial viability of your project.


Converting a house into flats can be a rewarding investment venture, offering increased rental income, property value appreciation, and a place in a market with high demand. However, it requires careful planning, adherence to legal requirements, and innovative architectural design. By understanding the process, budgeting accurately, and seeking professional advice, investors can navigate this venture successfully, unlocking the potential of their property and maximising their return on investment.

Transforming a house into multiple flats is not a venture to embark on alone. It requires the skill and expertise of professionals. The role of architects and design teams in this process cannot be overstated, as they bring a blend of creativity, compliance knowledge, and space optimisation to the table.


Working with HMO Architect and our design team can be instrumental. Our experience in development projects, including HMOs and conversions, provides an invaluable resource for ensuring your project’s success with the highest standards. Get your free discovery call today.

Picture of Giovanni Patania

Giovanni Patania

(Architect Director, Co-Founder)

Giovanni Patania is the Lead Architect and Co-Founder at HMO Architect and Windsor Patania Architects.

Originally from Siena, Italy, Giovanni worked as a Project Lead Architect at Foster+ Partners, designing Apple stores across the world,

An HMO Investor himself, Giovanni understands property thoroughly, both from an investor's perspective and technically, as an Architect.

With over 15 years of HMO development experience, working on over 150+ HMOs and a 95% Planning and Building Regulation success rate, Giovanni has the expertise and credentials to help you on your HMO journey."



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