Homes in multiple occupation (HMOs) have long been considered to offer solid returns for landlords in the private rental sector, but it seems that a growing number of landlords are now considering going down this route in the UK.
Property Reporter recently shared the findings of research conducted by Savills, which revealed that there has been “exceptionally strong investment activity” in the student housing sector in the past 12 months.
In fact, property investment in student housing climbed by 84 per cent year-on-year in the early stages of 2020.
Managing director of The Mistoria Group, investment property experts, Mish Liyanage explained that international investors in particular are being attracted to the UK market because of the relatively low cost of student property in the country.
He also explained why HMOs in particular are proving so popular. “An HMO property with a superior spec can deliver investors an average gross rental yield of 18 per cent, leveraged return on investment of 38 per cent plus, before any charges and voids,” he stated.
The good returns as well as the robust demand for higher education courses, particularly at UK institutions, has been helping to fuel this increased interest from buyers.
Of course, any landlord needs to ensure that their HMO complies with all the relevant regulations and is properly licensed before tenants are moved in.
A recent article for Letting Agent Today highlighted the risks of fire precautions not being put in place in HMOs after an incident in Oxfordshire that saw the third floor of a HMO catch fire. Because there are multiple occupants in an HMO, regulations relating to fire safety are stricter than for single-household lets.
If you need assistance with HMO licensing in Bristol, get in touch with us today to find out how we can help.