The ongoing housing shortage in the UK has created unprecedented demand for accommodation, particularly from young people. With the limited number of new homes being built there is little likelihood of the problem being resolved in the foreseeable future. The ongoing shortage has led to the proliferation of Houses in Multiple Occupancy (HMOs), which offer individual rooms with shared facilities such as kitchens and/or bathrooms.
Historically, HMOs have had a tarnished reputation due to rogue landlords offering sub-standard accommodation and poor service. This has, in many cases, attracted lower income tenants. However, the sector’s reputation is improving and it now appeals to a wide cross section of tenants. Increasing popularity has resulted in the sector expanding in recent times and there are now over 60,000 properties operating as HMOs. This number is set to increase as the housing shortage grows and affordability problems remain.
The principal attraction for HMO landlords is the secure and highly attractive rental income stream. Renting multiple rooms can result in a higher rental figure than that of a single occupancy. There is clearly an opportunity for our investors to enjoy the benefits of the HMO sector through quality accommodation supported by superior ongoing service.
We have a dedicated, in-house operation which will:
- Identify and help clients acquire suitable properties
- Add value by refurbishing them and converting to them to HMOs
- Provide fully refurbished and tenanted properties
The investment level to acquire an acol property (shared kitchen and bathroom) is around £150,000.
The investment level to acquire an acol+ property (all rooms have an en-suite) starts from £250,000.
The net rental yield from an acol property is typically between 7% and 9% p.a.