It is a well-known fact that as a country, we are still struggling with a lack of affordable housing for its residents. High house prices, changing work structures and differing lifestyles have lead people away from being home owners and peaked interests in renting property.
This change in demand has impacted on the rental market, with provider of multi-let services, Multi-Let UK, seeing a 150% year on year rise in investors purchasing multi-lets and HMOs.
Until April of this year, buy-to-let landlords were capitalising on the flexibility of the mortgages available to them and the lack of additional charges that came with expanding their portfolios. The increased Stamp Duty and Income Tax that comes with owning a second properties has shaved profits on these kinds of properties, and landlords are looking for ways to fill the yield deficit.
What was once deemed a traditional family property is now being converted into separate living quarters for multiple households, generating more income. Traditionally, these type of properties would be used as student lets in cities where the rent of a single occupant dwelling is high.
However, the impact of this change in the landlord landscape is spreading outside of the traditional low income/university areas and becoming a more cosmopolitan setting for young, working people to reside. Councils like Bexley and Crewe have seen a huge rise in their HMO landscape, particularly in smaller properties.
Whilst landlords find the healthier yields increasingly attractive, they do have their down sides. Managing an HMO can be very demanding. It requires far more from the landlord in terms of time management, commitment, initial investment and running costs.
If you or your client is interested in learning more about the ins and outs of HMOs, we’ve compiled a free, comprehensive guide! From the technical definition of an HMO to securing a license and, of course, funding your clients' investment, this guide covers everything you need to understand this alternative type of property investment. There’s even a top 10 things to consider before purchasing an HMO.
To download your free HMO eGuide, click below:
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