Mish Liyanage – Property Expert

The UK is enduring a chronic housing shortage. Demand for quality rental homes is surging — especially in university towns and growing regional cities — yet supply is lagging. But where others see obstacles, savvy property entrepreneurs can spot opportunity.

Here’s how to lean in, innovate, and build resilient property businesses in this shifting landscape.

Reimagine Underused Properties

Many cities are dotted with under-utilised or dilapidated buildings — old terraces, vacant commercial sites, former care homes — that still have solid bones. Converting them into HMOs (Houses in Multiple Occupation) or shared living spaces can unlock value.

With careful refurbishment, such buildings can be reactivated relatively quickly. Shared housing helps spread cost among multiple tenants, enhancing affordability, while areas with Article 4 constraints mean licensed HMOs become a rarer—and hence more valuable—asset class.

Leverage HMOs for Higher Yield

Traditional buy-to-let gives predictable returns — but HMOs can deliver stronger rental yields because you’re letting by room rather than by whole unit.

They attract a diverse tenant base: students, young professionals, people looking for flexible options. With demand rising for flexible, well-located housing, HMOs offer a compelling alternative to standard leases.

Tap Into Government & Social Housing Initiatives

Don’t neglect the power of public funding and policy tools. There are grants and incentives, particularly for energy efficiency, decarbonisation, or regeneration projects.

For landlords undertaking green retrofits or sustainable upgrades, funds like the Social Housing Decarbonisation Fund or ECO schemes can reduce capex burden. Aligning development with local housing goals can help you access support and navigate planning more smoothly.

Focus on High-Yield Locations & Niches

Where you invest matters. Segment your strategy: student housing, professional sharers, “mid-market” shared housing — choose niches with less competition and more certainty. Look for areas with structural demand:

• Proximity to universities, hospitals, transport hubs, or large employers.

• Under-supplied towns or postcodes where regeneration is underway.

• Emerging markets beyond London — northern cities (Manchester, Liverpool, Leeds, etc.) are showing strength in yields.

Build Local Intelligence via Partnerships

Scaling geographically or across market segments is risky without local know-how. Local partners (architects, builders, letting agents, compliance specialists) bring on-the-ground insight and reduce mistakes.

They can help you navigate planning rules, licensing, market quirks, while their networks can smooth procurement, tenant sourcing, ongoing management. Shared risk and trust also go a long way in delivering projects on budget and schedule.

Be Vigilant on Compliance, Licensing & Regulation

The regulatory environment is tightening across the UK: fire safety, EPC ratings, licensing, local rules, tenant protection laws. Non-compliance can carry heavy penalties.

• Early due diligence is essential — don’t assume what’s allowed in one borough is allowed next door.

• Factor in additional costs and delays for permit/licensing, inspections, legal audits.

• Stay ahead of proposed reforms (e.g. Renters’ Rights Bill, Section 21 replacement) to avoid being caught off guard.

Plan Financing Around Higher Costs

With interest rates still elevated and lenders more selective, your financing plan needs to be smarter:

• Leverage phased payments, refurbishment mortgages, bridging finance.

• Build buffers for unexpected cost overruns or regulatory delays.

• Explore joint ventures or equity partners to share capital exposure.

A Way Forward for Property Entrepreneurs

The property market is tougher now — but that raises the bar, not the barrier. The most successful entrepreneurs will be those who:

• See opportunity in undervalued assets

• Operate with systems, not guesswork

• Master compliance, risk control and local dynamics

• Execute with discipline, insight, and a tenant-first mindset

Think of this not as surviving the crisis, but using it as a proving ground. In doing so, you don’t just outlast — you build the kind of business that thrives in the new era of UK property investment.