The Increasing Demand for HMO’s
There has been a significant increase in the demand for HMO’s over the past 15 years, mainly driven by the affordability issues arising from the growth in house prices outstripping that of wage growth.
With the housing shortage ongoing and the gap between property prices and wages continuing to grow, the demand for HMO’s shows no sign of slowing down.
This article looks at what a HMO is, why a HMO may suit a renter and the viability of HMO lets for landlords.
What is A HMO?
A HMO (House of Multiple Occupancy), sometimes known as a “multi-let”, is a property occupied and rented by three or more, usually unrelated people.
Usually, a HMO property will have a shared kitchen, bathroom facilities (although en-suite facilities are also common) and may or may not have a communal living space. It will be designed with bedrooms being rented separately to increase and maximise rental income for the landlord.
Why Rent A HMO?
Rental costs of single properties in major cities such as London, Birmingham and Manchester continue to rise and are beyond the affordability of many young professionals with jobs in those cities.
Moving into an HMO provides a tenant with the option of moving into a property in a neighbourhood within easy commuting distance of their workplace and in a location that would otherwise be well outside their price range.
Rents will be listed for each bedroom rather than for the entire property. And with utility bills and council usually being shared between the tenants, the whole package is much more affordable and attractive for prospective tenants.
Living in a licensed HMO also gives tenants peace of mind that they will be living in a property that has met strict safety and quality standards, meaning that their home will be comfortable.
In addition, people who move into the city for work may not have the relative security of friends and family within easy reach. Renting A HMO lets them socialise with their housemates and build friendly relationships while settling in at work and in a new city.
Are HMO’s Viable for Landlords?
In short, yes. HMO’s allow landlords to maximise their income and profit from their property while also helping local authorities and the Government address the chronic need for housing.
For example, a landlord that owns a four-bed property will be able to increase their rental yield by 20-30% by converting it into an HMO.
Listing the bedrooms separately while offering excellent shared facilities effectively allows them to gain rent for the use of the communal spaces, rather than just once if they were renting out the whole property.
While HMO planning permission is required to convert any existing house into A HMO, however, in most cases, local authorities are very supportive of these applications.
And by using an experienced HMO architect and with the support of specialised letting agents with experience in renting HMO’s, the landlord will be able to reap greater rewards.
The benefits of HMO’s for tenants and landlords in this environment will keep HMO’s at the forefront of the rental market in the coming years.
HMO’s in North West London
If you’re a landlord in NW10 or the surrounding area looking to turn your property into a HMO, Regal Estates can help. Our expert team have over 25 years of experience helping landlords across Willesden, Dollis Hill, Neasden and surrounding areas successfully let their properties, with a large number of these being HMO’s. We can advise you on rental yields, licenses, regulations around converting a property to a HMO and more. Contact us today on 020 8459 2530 or email firstname.lastname@example.org.
Alternatively If you are looking for a room to rent In NW10, NW2 or NW6, browse available properties here.
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