Many buy to let property investors are moving over to HMO property investments as they battle increasing regulation and taxation changes.
HMO property investments can offer a higher yielding option when compared to standard buy to let, and many lenders are now recognising this and offering finance products for HMO property investments.
Leeds Building Society recently announced that it is now including five-year products in its bespoke HMO mortgage range. This move came on the back of intermediary feedback that landlord clients were looking for additional five-year options for small and large HMO property investments, as growing numbers sought to diversify their portfolios and move into this sector.
Houses in multiple occupation (HMOs) are nothing new, but with affordability issues continuing to impact first-time buyers and rents sitting at high levels, it’s evident that more people are staying in accommodation such as house shares for longer, well beyond their student years.
A study into HMO property investments by broadband and utilities provider Glide looked further into house shares, highlighting that London remained the best location in terms of the variety of house share opportunities, with over 19,000 rooms available. However, with the average monthly rent six times higher than the most affordable city to live in (average rent in London was suggested to be £3,278 pcm, compared to £499 in Bradford), the capital ranked 17th overall as the best city for house sharers.
Ranking the biggest UK cities on a range of measures – including the number of house shares in the city, number of job opportunities advertised, the cost of rent, university rankings and broadband speed – Bristol came out on top. The rest of the top 10 consisted of: Nottingham, Birmingham, Manchester, Liverpool, Derby, Southampton, Brighton and Hove, Leicester, and Portsmouth.
Landlords looking to venture into HMO property investments need to be fully aware of wider legislation changes as well as local licencing requirements when operating within this space. But, with increasing numbers of lending options becoming available, this is certainly an area worth considering.
Source: Residential Landlord