Just when you thought that Buy To Let property in the UK may be slowing down then comes along market forces namely supply and demand these are set to ignite a one sector of the UK Buy To Let market. Recent studies indicate that rises in student numbers combined with a shortage of student let homes means that houses in multiple occupation (HMO) are the next big thing.
Hometrack – a consultancy that analyses data about housing stock analysed 120 locations where students will be seeking new places to live. It has produced the first-ever league table of where the best rental returns for landlords are likely to appear
“Across the country, student numbers are growing,” says Richard Donnell, Hometrack’s director of research and author of the league table. “Universities and colleges are responding by building more halls of residence, often with private developers. But it’s not happening quickly enough. The result? A shortage, so rental returns are rising.”
Last year saw significant number of landlords in the private rented sector drop out of HMO’s ownership. The decline was revealed in a Review and Index published by the Association of Residential Letting Agents (ARLA). In October 2006 The HMO share of the whole rental sector dropped from nine percent to six percent this coinciding with the requirement to register the properties with local authorities and could represent a loss of as many as 75,000 properties to the multiple sharer market.
Nicholas Marr CEO of Homesgofast.com “We are currently marketing HMO Buy-To Let Property near to Sheffield University and we have all been surprised from the massive response by investors. I understood this type of investment property was almost dead in the water. When speaking to investors it is clearly that many are stuck with portfolios that are not providing an income. For them HMO Buy To Let seems to be the way forward as it can provide both future capital growth and a monthly income in a sector in short supply “
The reason behind HMO licensing is to protect the young and vulnerable people who often rent these types of homes. Licensing tackled low standards of fire safety, overcrowding, inadequate facilities and poor or unscrupulous management.
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