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Transforming Houses into Flats for a 63% Increase in Cashflow in 2024

Unlocking the Future: Title Splitting as a Strategic Investment

Embracing the future of property investment involves adopting the Title Splitting strategy. The concept is simple yet powerful – each property acquisition can significantly increase its value by creating or splitting into multiple units, coupled with high-end refurbishment. This approach yields a high return on investment (ROI) as it enables the generation of multiple rental incomes from a single property purchase. Imagine acquiring one property and transforming it into four units, each with a rental income of £1,000, resulting in a total income of £4,000 from one transaction. With this Title Split technique, it takes just a few transactions to potentially replace your primary income. In the East Midlands, for instance, a single property purchase can generate £24,000 in net income per annum after costs. This shows it will not take you long using Title Splits to reach your cashflow goals.

Reflecting on my past while working in a corporate role, I aspired to generate enough income to replace my six-figure salary. Though I had acquired properties over time, the traditional approach of building a portfolio one property at a time was not accelerating my progress. To break free from the daily grind and commute, I sought a strategy that would provide both high income and growth. That’s when I decided to invest in my education to become a professional property investor.

Among the various property investment strategies, I aimed for the least effort with the highest income, focusing on cash flow to replace my current income and equity growth to create a lasting legacy. Recognizing the potential in creating Buy-to-Let (BTL) apartments, especially through Title Splitting, became my chosen path.

Despite seeking advice from experienced mentors and professional advisers, the prevailing sentiment was that Title Splitting should only be done at the point of sale, as advised by solicitors. However, my intuition led me to believe that the capital value lies in Title Splitting at the earliest stage. I was determined to learn and implement this strategy, emphasizing immediate capital uplift and cash flow rather than waiting until the property is sold.

My first Title Split deal in 2017 involved purchasing two houses at auction in a small East Midlands town. By applying for planning permission and creating four apartments, I achieved a 30% higher valuation on day one compared to the valuation of the unsplit houses. Moreover, the BTL rental income increased by 63%. This success affirmed my strategy. In May 2022, I had the apartments individually valued, revealing a 38.46% higher ‘split value’ than the unsplit (block) value and a 50% increase in capital when compared to if they were still two houses.

Looking ahead to 2024, there are two exciting ‘Title Split’ opportunities with significant potential for capital uplift and cash flow, which you may not have considered yet?

Opportunity One

Major Title Split Announcement for 2024: New Permitted Development Rights

The UK government’s plan to modify permitted development rights in England and Wales presents a substantial opportunity for landlords and developers in 2024. Under these changes, creating two apartments in one house without planning permission will be possible in certain circumstances. With split values ranging from 25% to 40% higher than unsplit values, it is crucial to prepare for this era of the mini-block, allowing for 2-flat Title Splits.

While the Title Split strategy has been around for decades, limited expertise is available for developers aiming to implement it during ownership. Many landlords create apartments but fail to fully split them. With the upcoming government changes, utilizing permitted development rights to turn houses into apartments presents an enticing prospect. We need to be ready to take advantage of this as it will become a main stream strategy over the next few years.

Opportunity Two

My Personal Project: Build a House to Live or Flip – A Title Split with a GDV of £1.495M

While much of the Title Split focus revolves around block conversions, there are additional opportunities for Title Splitters in 2024. Illustrated below is a planned 2024 project for our property business,  showcasing the potential in Title Splitting land.

As a property investor, the numbers must align before making an investment. Here are the details:

House Number 1 (Original Purchase):
  • Purchase Price: £435,000
  • Refurbishment and Fees: £130,000
  • All-In Cost: £565,000
  • Expected Valuation: £695,000
House Number 2 (Planned Build):
  • Land Cost: £0 Its in the garden so its free!
  • Planning Costs: £20,000 for the planning permission and architect (Planning granted for pictured 4-bed detached)
  • Build Costs: £500,000 (including all other costs)
  • All-In Cost: £520,000
  • Expected Valuation: £800,000
Overall Project:
  • Gross Development Value (GDV): £1.495M
  • Cost of Project: £1.085M
  • Profit Before Tax: 37.78%

If you make this property your home (principal primary residence), you will not need to pay tax in the same way. It is a very efficient way of getting your dream house, although it is imperative you understand the planning rules when making the original investment.

What makes Title Split Developments appealing to investors in 2024 is the array of options to increase values across different project types. I am sure that you will all agree that changing permitted development rights will make things much easier.

For further information on Title Splitting and to explore Title Split opportunities, please contact:

Rachel Maria Knight

Specializing in training developers and landlords in the art of splitting land and apartment blocks.

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