The demand for shared accommodation continues to grow as people look for more affordable, flexible and social ways to live. At the same time, the number of houses in multiple occupation (HMOs) has fallen, with many landlords leaving the market due to increasing costs and tighter regulations. The number of HMO properties has dropped by 2.4%* during the last year and it’s creating a gap between HMO supply and tenant demand, presenting an exciting opportunity for those landlords in a position to invest.
HMOs are properties let by the room, paid for by at least three unrelated individuals, with shared facilities such as kitchen, bathroom and communal areas. Accounting for 2% of the UK's housing stock, the main attraction for landlords is the potential to generate higher rental yield and capital growth than single-tenant rentals. However, this advantage is balanced by the complexities and increased costs of owning a specialist buy-to-let property like this. Therefore, it’s important for landlords to understand all of the key requirements, from the need for a specialist HMO mortgage to licensing regulations and property maintenance. Here we highlight three key areas for every first-time HMO landlord to consider:
Rules and regulations can vary from council to council, so it’s wise to check on local requirements as early as possible to avoid unwelcome surprises.
For complex buy-to-lets such as HMOs, it makes sense to take advantage of the knowledge and experience of the professionals. For example, a qualified accountant or tax specialist can advise on matters ranging from identifying the most tax-efficient option and cost-efficiencies, to deciding the appropriate business structure for your investment; an independent mortgage broker will search the market for the best HMO mortgage deals available, both long and short-term; and a lettings agent can take the strain when it comes to managing and maintaining your HMO property.
Our team at Vincent Burch Mortgage Services has extensive experience in the specialist HMO mortgage market and can offer personal, professional, and impartial advice on all aspects of your investment. Whether you’re looking for an HMO mortgage, short-term finance for energy efficiency improvements or a property conversion, we can help. Our whole-of-market approach means we have access to specialist lenders such as Lendinvest, Landbay and Aldermore and can secure a mortgage deal tailored to your individual needs.
As a whole-of-market intermediary, our expert team at Vincent Burch Mortgage Services has access to all specialist lenders offering HMO mortgages. We’ll work together to understand your individual requirements and find the best mortgage for your plans. With extensive experience, we are well-placed to guide you through the process and pride ourselves on helping customers make the most of their investment.
Advice that’s tailored to your own bespoke situation.
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