Article 4 - Has it Killed HMO Investing?

Most investors hear the words “Article 4” and immediately assume the opportunity has gone.

But the reality is very different. Some of the strongest and most valuable HMO markets in the UK are under Article 4 directions, and experienced investors are still buying in these areas every single day.

In this episode, I break down what Article 4 actually means, why so many investors misunderstand it, and how professional HMO investors assess and mitigate planning risk before committing to deals.

🎯 What You’ll Learn

• What Article 4 really is and why it’s often misunderstood
• How restricted HMO supply can actually increase asset values over time
• The biggest planning risks investors need to understand
• How experienced investors are doing it
• How to structure deals subject to planning

If you’ve been avoiding Article 4 areas or feel overwhelmed by planning risk, this episode will help you approach these markets with far more clarity, confidence, and strategy.

Download your copy of The HMO Investors Guide to The Renters’ Rights Act here:
 https://thehmoroadmap.co.uk/

💻 Resources & Mentions

• Join my Accelerator Programme: If you’d like my direct input on your current or next project, you can watch this video or book a complimentary strategy call with me here.
• The HMO Roadmap: Feeling overwhelmed? Access 400+ tools, templates, and lessons to help you start, scale, and systemise your HMO business - all in one place. Join here.
• The HMO Community: Got questions or need support? Come and connect with 10,000+ investors inside our Free Facebook Group here.
• Social: Follow me on Instagram for daily HMO tips, advice, and behind-the-scenes updates here.

Transcript

Andy Graham (00:02.67)

Hey, I'm Andy and you're listening to the HMO Podcast. Over 10 years ago, I set myself the challenge of building my own property portfolio. And what began as a short-term investment plan soon became a long-term commitment to change the way young people live together. I've now built several successful businesses. I've raised millions of pounds of investment and I've managed thousands of tenants. Join me and some very special guests to discover the tips, tricks and hacks, the ups and the downs, the best practice and everything else you need to know to start, scale and systemise your very own HMO portfolio now.

Andy Graham (00:40.684)

Article 4, probably two of the most misunderstood words, certainly when you put them together, in HMO investing. Because the moment people hear it, they just assume that the opportunity has gone, that ship has sailed, as though the council has suddenly switched off the ability to invest in HMOs altogether. Now for the last few years that narrative has become more and more common. Investors have in some cases been avoiding areas under Article 4 direction almost entirely, and good deals have been getting dismissed.

People have been acting as though this planning risk automatically means that it's a non-starter. But the reality is very different. Some of the strongest HMO markets in the country are under Article 4 directions. Some of the most valuable HMOs are in those towns and cities. And a lot of very experienced investors are still buying in these locations every single day and making a lot of money in the process. And let's not forget that Article 4 is nothing new. In some cases, it's been around 10, 20 plus years.

And investors like me have done very well out of it. Now look, here's the truth. Article four doesn't eliminate opportunity. What it does do is it raises the bar. It makes it harder, but that's exactly why it can be a huge advantage for investors who understand it and are prepared to approach it in the right way. 

So in today's episode, I want to talk to you honestly about Article four, what it means in practice, why so many investors get it wrong, why it can strengthen values and most importantly, how experienced investors assess and mitigate planning risks before they commit to deals. We do all of that then we can take advantage of the huge opportunities that are sitting right there under our nose. Let's get into it.

Hey guys, it's Andy here. We're going to be getting back to the podcast in just a moment, but before we do, I want to tell you very quickly about the HMO roadmap. Now, if you're serious about replacing your income, or perhaps you've already got a HMO portfolio that you want to scale up, then the HMO roadmap really is your one-stop shop. Inside the roadmap, you'll find a full 60 lesson course delivered by me,

Andy Graham (02:42.391)

teaching you how to find more deals, how to fund more deals and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer, and how to manage your properties and tenants for the future. We've also got guest workshops added every single month. We've got new videos added every single week about all sorts of topics. We've got downloadable resources, cheat sheets and swipe files to help you. We've got case studies from guests and community members who are doing incredible projects that you can learn from. And we've also built an application just for you, that allows you to appraise and evaluate your deals, stack them side by side and track the key metrics that are most important to you. To find out more, head to theHMORoadmap.co.uk now and come and join our incredible community of HMO property investors.

Andy Graham (03:33.201)

Okay, welcome back. Now, I wanted to record this episode because I genuinely think Article 4 has become one of those topics where people have almost stopped thinking rationally about it. The assumption immediately becomes that there is just no way that they're going to get planning to convert a house into a HMO, that it's going to be far too hard. And that is just too simplistic. Now, don't get me wrong, Article 4 absolutely does change the way we need to approach investing. It increases the complexity.

There's more due diligence required. There's more planning scrutiny. There is just ultimately more risk and there is far less room for lazy investing. But higher barriers to entry like this are often exactly what create opportunity in the property market. Because you see when something becomes harder, fewer people are willing to do it and fewer people understand how to do it. And that's why some of the most established and valuable HMO markets in the UK today are under Article 4 directions. 

There's some very good properties in very good locations serving very strong demographics of tenants. The key difference, and this is what we need to figure out, is how to understand how we need to operate in those markets to take advantage of opportunities. We need to understand how to buy with margin. We need to understand how to structure deals intelligently in these locations. We need to make sure that we've got different exits covered off. But most importantly, we need to be able to assess planning risks before we commit our capital. 

Professional investors are still buying in areas under Article 4 directions every single day. They've just adapted their approach and they've managed their expectations. Well today, I'm going to break it all down for you. What Article 4 actually is, what you need to do and how you can build an incredible business and still do incredible deals in areas under an Article 4 direction. 

Now, I want to start today by just covering off for perhaps anybody who isn't totally sure what article four actually is. Now, first and foremost, let me be clear. It is a completely separate topic altogether to HMO licensing. Please don't confuse the two. Article four is about planning and a planning permission that you would need. HMO licensing really is just a tick box exercise that you need to do for the local council. Now,

Andy Graham (05:54.225)

What does Article 4 do? What is it? Well, ultimately it is the removal of permitted development rights. Now in the case that we're interested in, it's the removal of the permitted development right to turn a house, C3, into a HMO, C4. And it means that we have to get planning permission to do that. It does not mean though that HMOs are banned. I'll be honest, many locations, many councils are quite anti-HMO.

It began initially as being quite an anti-student movement. That's sort of really where it came from that you'll have seen for many reasons politically that that has become sort of a slightly broader dislike for other demographics. But ultimately it is just the removal of the permitted development right. However, I would suggest that you are intelligent about perhaps what is going on behind the scenes at the council and what is driving these sorts of policy decisions.

Local community and residents. Obviously they don't want HMOs because they don't want students or they don't want perhaps immigrants or they don't like the idea of noisy, busy HMOs and things like that. But again, it doesn't mean that HMOs are banned. Councils are really just seeking greater control over the concentration and the housing mix. That is really what is going on. And there is massive misunderstanding in the market around what Article 4 actually does. 

So the important distinction here is that it makes it harder. It makes it, I guess in our case, not automatic. We can't just do it, but it doesn't make it impossible. article four can actually, and investing in article four locations, it actually can be a really key part of a successful HMO strategy. Now, why do investors react so negatively? Well, I've mentioned a few of these already, but there is uncertainty with this. We have to go and get planning permission. And of course, there is always the risk that we might not get planning permission. 

It also slows projects down. Anything that requires us to go and get planning permission is inevitably going to slow things down. The planning process itself takes time. You have to prepare documents and all of that jazz to approach it. It can make it a bit tricky with lending and the type of lending that you can get in day one. You've got more professional costs and fees and you have to wait for other people to potentially consult on things. So it's complicated and it takes a little bit longer. It's also just

Andy Graham (08:19.91)

ultimately less predictable, the financial outcome, whilst the planning itself is not entirely predictable, although we can manage, mitigate some of the risks. We're going to talk about that today. The economics become less predictable than a property where you could just automatically convert it. Cause what you don't know is even if you do get planning permission, are the council going to insist on some changes or how much money are you going to have to invest to ultimately get that planning permission?

You have to do more due diligence as well. You really do have to understand why and when councils will either permit or refuse applications to convert houses into HMOs. So property investing became unusually easy for a period of time, if I'm honest. I still think it's pretty crazy that you can just convert a house to HMO. I think it's a strange thing to just permit because in reality, it does put an additional strain on amenities and things like that. 

And I actually think that in many areas and many towns and cities around the country where it was left unregulated, it has been pretty disastrous and it would have been far better had they have just controlled it, slow things down a little bit. Yes, we'd have had to jump through a few more hoops and climb over some obstacles. But for those of us prepared to do it, the outcomes would have been far better. Unfortunately, for a lot of people in some of those locations where it has been just unregulated, there's a complete oversupply of that sort of housing stock and that's very damaging to your business. If you're an investor, if you're an operator of HMOs. 

Now let's talk about why article four can be advantageous. Well, I've touched on this already, but ultimately it makes it harder to create new HMO supply. So if you get into that market, you're part of a special group of people that have this permission and nobody else can just come along and get it unless they're really prepared to put a lot of that work in and get it right.

This gives you a lot of protection, gives you a lot of insulation against surging supply of competing stock. And it also means that over time, what tends to happen is that property will appreciate because that commodity is in short supply. More and more people are applying external pressures. More people want to get in, more people want to do it. So inevitably people want to buy this sort of stock and they're willing to pay more for it. And that gradually pushes the value of.

Andy Graham (10:39.702)

that property and that asset up over time. So it's a really, really, really useful tool when you have a mid to long term view. I'll be honest, short term, certainly if you want to buy something that is existing or certainly if you want to buy something that is in an established area under an Article 4 direction and it has very clear potential to convert to a HMO, you probably will pay for some of that premium upfront. An investor, whomever is selling it will have probably an agent baked a lot of that potential value into the asking price. And of course that means that your economics at the back end might be a bit softer than they would be if you went and bought a property that wasn't in an Article 4 direction. And I guess that that's the big thing for most investors, right? The economics can sometimes just not be as favorable. 

However, if you buy something that doesn't or isn't being used as a HMO and you convert it to a HMO with the appropriate planning, you get that planning. If that's in an area under Article 4 direction, you will add a lot of value to that asset. So you get that real boost because you then have got that premium attached to the asset that you got the planning permission for. There's just ultimately less competition though. If you're in an area of Article 4 direction, there's generally just less competition. There are some towns and cities across the country, as I've mentioned, where this was left unregulated and that suppresses the value of assets. 

In this case, when there is an Article 4 direction, it tends to force the value of those assets up. That is an advantage to us. And one of the other benefits is that the higher barrier to entry does mean that the market conditions gradually improve over time as well. You have a better housing stock, okay? Now, at the end of the day, when supply becomes harder to create, existing stock often just becomes more valuable. So that is really what you want to be thinking about when you're looking at investing in an area that is under an Article 4 direction. 

Now, the real risk isn't actually Article 4. The real risk is that you might overpay for something that ultimately you don't get planning on. Or maybe it doesn't need planning, it's already got planning, but doesn't perform as well as you want. Or by the time you've got your planning permission, you've spent so much, the economics have been skewed a little bit and that asset

Andy Graham (13:05.654)

And the performance of it just isn't what you want. So that is a very real risk for us. Of course, one of the other big risks is just that we don't get the planning. We identify a property, we do loads of work, we spend loads of money, we invest lots of time into it, and then we don't get it. And it can be really tricky. Planning can be a real bitch. Sometimes you might have ticked all the boxes, but you'll still get a refusal because some councils around the country are far more difficult than others.

And you might have grounds to appeal and you might have to take it to appeal, but that in itself might take nine months. You'll be in that whole process for 12 months and you have to think about during that period, the sitting costs. What are the holding costs? What are you spending while you're just waiting to get the planning permission? Has that been baked into your deal? So all of these things need to be very seriously considered, but overpaying is a big risk and ultimately not getting the planning is a very, very big risk. 

Now, professional investors do things very differently because they really focus on mitigating the downside, mitigating delays, mitigating refusal risk. They're considering alternative exits, policy direction and all of this sort of stuff before they buy. And I think that this is where a lot of investors really get article four direction wrong. They're not wrong in a sense that it's harder to get planning permission and it can be overwhelming and it can be concerning because of these risks. 

However, if you know how to deal with this sort of stuff, it, like most things in this game, can be very logical to navigate. And this is what I encourage all of my clients, all of my one-to-one mentees to make sure they're doing if we're considering investing in an area under Article Four direction. And yes, there's some time that needs to be spent doing this and yes, usually a bit of money to spend in the process. But once you get this right, you can apply the logic and the data and that confidence to every single property that you look at in that location. So the good news is getting your head around this, you only really have to do once. There is nuance when you look at each individual property on its own merits. You're looking at things like amenities and room sizes and all of that stuff. But generally speaking, the policy that drives the decision making and whether or not you're likely to get planning or get refused, that theory is all the same.

Andy Graham (15:29.166)

And the other good news here is that you can employ a couple of people that are real experts in the subject who can significantly reduce your risk even further. So how do they do it? Well, experienced investors and investors who understand Article Four directions do a couple of things. First and foremost, if they are going to buy anything that needs planning, they will be very intelligent in terms of the margin. They will make sure that they're purchasing at a price that protects the downside. 

So a price that gives them coverage for all of their additional costs, potential delays and all of that jazz. And they won't buy it if that isn't in the deal, if that margin just isn't available. They'll also avoid relying on best case scenarios. They'll be happy to look at plan B and plan C and even if the deal isn't as good as it would have been if it was plan A, it'll still be okay. It'll still be worth keeping. Okay. It'll still make sense.

And when it comes to planning, they make sure that they completely understand the policy on that decision making. Now, there are a number of different things in here, and this is where it gets quite technical and this is where it gets a little bit scary. But when it comes to mitigating the planning risk, there are a few things that really ought to be done. Every local authority underpinning its planning policy has certain requirements and thresholds and a lot of it is very binary. 

So I'm going to give you some examples and this is not exhaustive of I suppose the information or the requirements that underpin their decision making, but certainly some of the big stuff. First and foremost, the density, the number of HMOs either on a street or within a radius of a property or within the line of sight, different councils apply this sort of thing in different ways that will have a very large bearing on whether you are likely to get planning permission or not.

Now, usually you can go onto a council's website and you can extract information that most local authorities will make public and you can actually see what that density is. There are some cities that I've bought lots of properties in and you can literally go on and you can download a density list from the local authority and you can see what the density of HMOs is on that street. And generally speaking, if that density is upwards of 20%, so if 20% of the houses are on that street or within that radius,

Andy Graham (17:55.914)

Whatever categorization the local authority is using, if you are north of that density limit, there's a good chance you won't get planning. You'd have to have an extremely compelling case. Your risk would be very high if you pursued it. If it's sub 20 or whatever the local authority that you're operating in sets, then there's a good chance you will get it subject to other factors being meant. 

Interestingly, there is an upper threshold as well. Usually if there are 80% density kind of levels on the street to within that radius. The precedent has been set and they'll almost just sort of shrug the shoulders because the kind is saying, well, what difference does one more make? So it's really useful to understand that data. Sometimes it's easier to get hold of than other times. It really does depend on the local authority. And as you might understand, some local authorities are a bit cagey in giving this out because they don't necessarily want to make your life any easier. They would quite happy to put you off the idea before you even give it a go. So that's one factor to consider. 

There are others. Another one is factors such as sandwiching. So if you aren't familiar with the idea of sandwiching, imagine that there are three properties in a row, terraced, and the property in the middle of those three is not a HMO, but the ones either side are.

That property in the middle that's not a HMO has been sandwiched at some point. Now that may have happened pre-planning permission, okay? Now, not ideal if you live in a house in the middle. You've got HMOs on either side. In reality, and in all fairness, if they wanted to sell their house, who were they going to sell it to? Are they likely to sell it to a family at genuine market value that want to live between two HMOs? Probably not, in all honesty.

Sometimes there's a very strong case there of a property like that comes up for sale and they struggle to sell it because it's sandwiched. That can be a good case to go to the planning department and say, look, this property is already sandwiched. It doesn't really make sense as a family home anymore. So our proposal is to also turn this into HMO. There's a good chance you might get it. However, imagine that those three properties in a row, one on the edge is a HMO and the other two aren't. If the other property on the other side,

Andy Graham (20:18.164)

Let's say that that's the one that we want to buy if we want to go and apply for planning permission on that by proposing to turn that HMO in that property into a HMO. We are by virtue creating a sandwich. The property in the middle is obviously getting sandwiched and the council will almost certainly say no to that because why would they want to put that sort of an impact on that house? It simply wouldn't be fair. So that's another really kind of black and white policy that you can look out and you can find out more about.

Other things such as amenity are very, very important. Now, obviously room standards and light and things like that, usual kind of planning jazz, but also, and this is where a lot of local authorities will squeeze investors like us. It's on the parking requirements, those sorts of amenity pressures. Now again, every local authority is different. So it's really important that you thoroughly understand their policy on this, but the number of parking spaces relevant to the number of rooms that you're proposing is quite important. If there are no parking spaces at all, there's going to be a good argument that they're not needed. Maybe it's on public transport routes. Maybe the precedent has already been set by many other HMOs in the area that have been granted planning permission recently or historically. 

Sometimes, however, it can be difficult to contend with that if you're in a residential location and there really is a sort of a challenge with parking and lots of it is on the street and it's difficult for residents. You're going to have to have quite a compelling argument in case to do this. And in reality, you might have to curtail the number of rooms that you want. You might have to make some alterations at the front to try and get enough or sufficient parking on there. So we're really just scratching the surface here. And what I don't want to do today, at least, is go into the nitty gritty of every single planning risk that you need to think about and try and mitigate when it comes to Article 4. 

What I would rather say is that you need to go and put some solid work into understanding that local policy, that council's position on all of this stuff. Really understand what applications have been permitted, what applications have been refused and why. Take the information from these case studies and use it to your advantage. Build your schemes around what has been successful. 

Andy Graham (22:36.746)

Avoid things that have been for other investors unsuccessful and be really intelligent about this. Spend some time and it's a pretty boring exercise, but going through the policy, the local policy and the national planning policy and make sure you really understand that kind of policy making and the decision making process when it comes to HMOs and employ all of that stuff. If you're really intelligent about it, get all of those documents, plug it all into AI, build a GPT that's really specialized in this sort of subject and field for you and you can help it try and ascertain your planning risk. 

But ultimately, what I would say, if you really want to reduce that risk as far as possible, you employ a planning consultant who specializes in exactly this sort of thing. And here's why this is so important. Planning is an art. It certainly isn't a science. Some of it we would like to think is a science. We've ticked those boxes. Thank you very much. Give me planning permission. But what I have found after doing this for nearly 20 years is that a lot of it actually is quite subjective and it's interpreted and fed back from a decision perspective in very, very different ways. And without the experience of understanding local planning departments and how they operate and how you can technically overcome objections and handle them.

For example, if you're just an inexperienced investor and you don't have much experience of doing planning applications, then this sort of thing you're going to find very, very difficult. Whereas a good experienced planning consultant will know exactly how to handle the local authority and they will know exactly what information from the planning policy and the framework that they need to employ to get you that planning permission. That is a career. That is a specialty. And there is a subspecialty in that a planning consultant who is really on it when it comes to HMOs, that is kind of gold dust, right? 

Now, there are very few of those people around. If you do want or need somebody like that, if you're on my programs, I have that person, an absolute expert up and down the country at getting planning applications and in many cases, very, very complicated and challenging schemes. But somebody like that can help close the gap when it comes to that planning risk. And that is so incredibly important. Now,

Andy Graham (25:03.678)

Let's just talk for a second aside from the planning risk and the financial risks and things like that. There are some other ways that we can mitigate risk and one of them is structuring the deal in the right way. If we're interested in buying a property in an Article 4 direction, let's say it's a three bed, seven detached house. We think we can turn it into a six bed HMO, but we're going to need planning permission on it. We know that there are going to be quite a few hoops to jump through. We're going to have to go and get planning permission.

We're going to probably have to spend quite a bit of money. It's going to take some time. We don't quite know where it's all going to pan out and all of this stuff. And that can make it very difficult to make a decision as to what you're going to pay for a property. But if we can be creative and some of my clients have been doing this just beautifully over the last few months, especially in one or two locations that is typically very difficult to get these schemes approved, you can significantly reduce the risk. So one of the ways to squeeze and squash this downside risk is to offer subject to planning. That way you get to control the opportunity without the full exposure. 

And it depends on the type of property and it depends on the price that the seller wants and how long it's been on the market, whether or not they're prepared to entertain and offer subject to planning. But trust me, some people will, some won't, many won't, but some will. And you don't need to do many deals. You just need to do some. You just need to do the ones that you need to do.

And if you can get that agreed, the great thing is you can go away and you can focus on your planning without buying the property, get it all tied up subject to planning. You can keep all of your sitting costs low because you haven't actually bought it. So you don't need to draw down on a mortgage. You don't have to take a loan out to do it. So you've got none of those expenses. You really just have your soft costs of planning, consultancy, drawings for your architectural scheme, all of that jazz. And then you have to be patient and wait and you have to kind of work it through.

If you can arrange those sorts of deals, you are onto a real winner. And look, worst case here is that you don't get the planning after all, and you spent a few quid, but you've also saved tens, not hundreds of thousands of pounds buying a lemon, which is the point here. And if you do get it, you've bought something that was probably at a pretty standard bricks and mortar value that you've got the planning on.

Andy Graham (27:21.684)

with very little risk because you structured it in a particular way and you knew all of this stuff that we've been talking about today. And as soon as that planning comes through, bang, you've got a premium attached to the value of your property. You may have just increased that value by 10 or 15 percent just by going and getting that planning permission. Now, yes, you still might need to go and do your work and your refurb and turn it into a HMO, but that equity significantly then reduces your risk and it puts you in that very special category of people.

And that limited number of HMOs that are in that market. So it really is a superb way to just control that downside risk. It isn't always possible and it does require some very good structuring and very good negotiating and sophisticated investors. They're really good at this. They understand it. They've done it before. And I understand that if you haven't done it, it can be a bit daunting. That is why working with the right people, guides, mentors, those sorts of people that can help you do this stuff is so important. But it's a really great strategy to employ if you want to look at these sorts of properties in these sorts of locations. 

Now let's just for a second talk about buying unconditionally. And what do I mean by that? Well, I mean buying something that doesn't have planning permission that you know will need planning permission to do what you want with it. You're going to put an offer in and it's unconditional. The vendor wants 300,000. You're going to pay 300,000 and you're going to just go and get the planning yourself. You need to be really sensible here. This is where

You have to have your numbers completely nailed down. However, there can still be opportunity in this because if you're prepared to do that and perhaps this is a property that's been sitting on the market for a little while, it hasn't moved. If you are prepared to do this, you can be quite bullish on what you're prepared to pay for it. And you've got very little to lose, but you need to make sure that obviously you've got that margin built in if you do have some challenges, some hurdles. But buying unconditionally and going straight to planning is in itself a really great strategy, only if you buy at the right price. 

If you offer subject to planning and get something agreed, you can afford to pay a little bit more because your risk is going to be lower. If you're going to buy unconditionally, generally speaking, you want to be buying at a suppressed value to cater to account for the risk that you are going to have to then take as well. So I'm not saying that you shouldn't buy anything unconditionally, but I am saying that you have to absolutely have margin in it. You absolutely

Andy Graham (29:47.414)

have to have mitigated the risk as far as you possibly can. You should have done all of your due diligence on the planning policy and the framework, likelihood of outcome, looking at case studies examples, employing a planning consultant, really kind of doing that full pack of due diligence so that before you buy it, you know exactly what the chances are. You want to be 70, 80, 90 % sure you are going to get planning. If you're not, if you're only 10, 20 or 30 % sure, you're probably buying the wrong thing and you just steer well well clear.

But the only way to reduce that risk is to kind of tackle all of these different facets simultaneously. Buying an areas of article full direction if you do need to go and get the planning if it's not a going concern It requires you to do all of this stuff Understand what the risks are mitigate all of those risks negotiate really well with vendors or structure deals intelligently And if you're prepared to do all of this all of this stuff that I've talked about in today's episode

You can and will find some really, really great properties and you will own them in invariably some of the best locations in the country and better yet, they will probably continue to be some of the best locations in the country or maybe better yet continue to get better and better and better over time. And that for me is the whole point of doing all of this, the best assets and the best locations. And while the economics might not be the best on paper today. Give it a bit of time. Let that asset mature. Let all the result compound. 

And boy, you're going to have such an incredible investment. Your five year, 10 year plus self will be so grateful that you did this work now and you built this portfolio and you got these really incredible assets into your bag. So there we go guys. Article four direction, hopefully, and I appreciate this was a bit of a whistle stop tour, but I just wanted to lift the lid on it and I wanted to reassure everybody that you don't have to steer clear of Article 4s at all. You don't have to panic. It isn't all over. You just have to think a little bit differently. You just have to accept that it might take a bit longer. It might cost a bit more. The numbers might not be quite as good in the short term. But if you take all of this into account and you do it and employ it in the right way, the results can be incredible and you can build such a good portfolio given a little bit of time.

Andy Graham (32:10.804)

And look, while it is a little bit slow, the way to counter this is just put more deals in your bag. Try and find more deals, get more under offer, subject to planning or an option agreement. Build that pipeline, expect some to fall over. That is what serious and sophisticated investors are doing. If you're putting all of your eggs in the basket of one deal and it takes six months to get the planning and then you go ahead or maybe it falls over and you've to go back to square one, that's just not going to be good enough. What you really want is a few things going on all at once.

Hopefully you get planning on all of them, but maybe you won't get it on some of them and you can pick and choose what you will simply proceed with. That is really the game that you want to be playing here. Yes, Article 4 creates more friction. Yes, there's more complexity. Yes, you have to do more due diligence. And yes, you have to have a far greater understanding of the local planning policy before you buy anything. But those barriers to entry are, like I said, what create the opportunity. It becomes harder to create the HMO supply.

Existing compliance stock just becomes more valuable over time. You'll own that. You'll benefit from that. And investors who genuinely understand the risk and are able to manage all of this themselves, they will get the most. They will achieve the best possible results in the market. The key isn't avoiding planning risk entirely. It's just understanding it properly, knowing your downside before you buy, having different exits in mind, buying with enough margin, approaching deals with the right mindset of a professional investor rather than just relying on one single outcome because Article 4 isn't killing the HMO model at all. It simply raised the standard required to succeed. For investors willing to understand that properly and do the work, there is enormous opportunity out there in the market. 

That is it for today's episode, guys. I hope you've enjoyed it. I hope you found it useful. I hope you have found some inspiration, some motivation, some encouragement that you perhaps needed when you're looking for deals. And trust me,

Just come and check out the community and look at what some of the other people are actually doing in our network and the deals that they're getting agreed and getting planning permission on. I promise you'll be pleasantly surprised. Now, if all of this field sounds a little bit overwhelming, I wouldn't blame you because it is a tricky subject and you need a bit of hand holding. You want that support and that guidance from an expert, from someone who's been there and walked the walk.

Andy Graham (34:35.828)

Head to the show notes and at the top of the show notes, you'll find a link. You can watch a video and in that video, you can find a little bit more out about what working with me is like, what it includes, what you will get from it, how I can help you. And if it sounds good to you, you can book yourself a free strategy call with me and we can have a chat. can have a discussion about your business, what's going on, what you want to do with it, the challenges you're facing, and we can put a plan together.

If, of course, you just want to do things in your own time at your own pace, head to theHMOroadmap.co.uk now, get yourself signed up as a member. And there's tons of stuff, including master classes from planning consultants on Article 4 direction and everything else you could possibly need in there, including all of the tools, resources, downloadable templates that you need to build your own HMO property business. 

That's it, guys. Thank you again for tuning in today. And don't forget that I'll be right back here in the very same place next week. So please join me then for another installment of the HMO Podcast.