HMOs seen as most popular with investors

Houses in Multiple Occupation (HMO) are expected to be the most popular property type for property investors in 2016, according to Shawbrook's latest client barometer

Section: mobile apps categories

34% of investors said HMOs were their most preferred property type, with terraced housing second on 28% and flats and maisonettes third at 22%.


However, 50% of those surveyed said that valuations, planning and licensing were an ongoing challenge, even though 42% had an HMO property in their portfolio and 46% either wanted to expand or enter the HMO market.

Karen Bennett, Sales & Marketing Director of Commercial Mortgages at Shawbrook, said: “As a lender, we’ve certainly seen a surge on interest in HMOs over the past year and our recent broker and client barometers confirm a big appetite in the market. 

“This asset class has undergone significant change over the past decade with some very clear tenant and investor profiles emerging to bring some real quality to the sector.”

72% of investors cited high potential yields as the main reason for investing in HMOs, followed by the potential for capital growth on 29% and reduced risks of rental voids compared with buy-to-let properties on 18%.  

“Whilst the high yields make for an attractive investment, caution must be taken with regard to planning and licensing requirements, along with the challenges and pitfalls of the valuation process,” added Karen. 

“Working with a professional broker is a sound strategy in order to take advantage of the opportunities on offer for borrowers looking to expand into this market, and their knowledge and experience bring a huge amount to the table when trying to achieve a good outcome for the borrower.”
 

Keywords: Bridging Finance, Commercial Finance, Bridging Lender, Commercial Lender, Alternative Finance, Broker news, Bridging loans, Shawbrook Bank, HMO, Property Investor

Source: Bridging & Commercial — https://bridgingandcommercial.co.uk/hmos-seen-as-most-popular-with-investors