Landlords plan to add HMO’s

Over a fifth of landlords, 21%, intend to add houses in multiple occupation (HMO’s) to their portfolio over the next year, according to reports.

More than a third, 40%, of landlords plan to sell terraced houses in the year ahead, while only 8% of landlords intend to sell HMOs.

Data collected shows that HMOs saw the greatest average rental yields in Q2 at 6.3%, compared to the market average of 5.5%.

Currently rental yields are at a nine-year low, with average yields across all property types having dropped by 0.3% in Q2.

Landlords with between 11 and 19 properties saw the highest average yields at 5.9%, and landlords in the North West were the best region for yields, similarly averaging 5.9%.

In a time of market uncertainty, HMOs are an attractive option for professional landlords looking to maximise yields. As HMOs attract multiple tenancies, gross rental income tends to outstrip single lets meaning the rental income is more secure if one tenant leaves a void.

The expansion of the HMO sector underlines how experienced landlords are rebalancing their portfolios.

If you are a professional Landlord this form of letting is worth very serious research as the other key issue is a far better sell on figure of the property than single units.

If you would like to know more about a new or re-mortgage please do make contact and one of our independent advisers will be happy to assist.