HMO Love affair…
The HMO (House in Multiple Occupation) and the property investor are having a love affair at the moment says Darren Haughton of Osprey Lettings.
The opportunity to buy one property and create up to 6 units out of it and therefore more than trebling your potential rent (if done correctly) is too much for many landlords to resist, and it’s almost like every other investor either has one or wants one.
Just for clarification, a HMO property is where 3 or more non related people share a property, in most parts of the country you can house up to 6 people in a HMO before you need planning (unless you are in an elective Article 4 area) and once you get to 7 or more people you will have to have planning consent. If the property is 5 or more occupants and over 3 stories in height then you will need to have a License (and some areas, this will apply to other properties too as selective licensing creeps across the UK)
The HMO is not a new thing, it has been around for many years and so why the sudden interest now?…
As the housing supply reduces, demand increases, and people move around more for work, house shares are going to become a major part in housing the nation, and HMO’s have undergone massive change due to this.
In 2004, the Housing Act brought about massive changes to the requirements and specification required for a HMO property, with strict guidelines for landlords as to how they should be constructed and managed, many of the regulations are based around fire safety and being suitable for the number of residents it is designed for.
The effects of this meant that the HMO had a facelift and gone are the days of poorly run, sub standard properties and the image of them improved. The more responsible landlord has started to invest in them and this has led to the “PROFESSIONAL HOUSE SHARE” where a property in a nice location with easy access for the workplace and amenities, comfortable communal areas and a high standard of fittings will appeal to the professional market. This is the new concept slowly working its way across the UK and one where we’re experiencing a growing amount of interest in here at Osprey Lettings, more so from our Kettering office.
We would not want to deal with any non-compliant, run down, overcrowded type properties or any that were owned by landlords that do not take their responsibilities seriously but with our own experience, learning about the regulations that apply to HMO properties, working with the council on Planning laws locally and what they expect in their local HMO properties also understanding fire regulations, this can be a very viable option to many investors.
For advice on HMO’s from what property/ies would make ideal investments, regulations, what facilities and fittings are required and how we market and manage thereafter please contact us, we’d be delighted to speak with you.