urbanist_architecture_planning_permission_for_hmo_house_in_multiple_occupation

HMO or House in Multiple Occupation is generally considered to be a property let to 3 or more unrelated people
rather than a single family unit. Each resident has their own bedroom but share a communal kitchen and bathroom.
This typically delivers a higher yield on the potential investment. The average yield for a standard buy-to-let in
London and the South East is 5% whereas an HMO can currently offer on average yield of 13%.

New research by Platinum Property Partners as of 6th July 2015 has shown that every £1,000 invested into HMOs in
2010 would have increased to £2,080 – over double the original invested in under 5 years. A standard buy-to-let
investment would only reach £1,770. So for example, a 5 bedroom house might have a market rent of £1,200 when
let to a single family. But if the same property were let as HMO for £400 per room, the potential rental could be
£2,000.

The initial investment needs to be greater to create an HMO friendly property (more bedrooms/less communal areas)
but they do present much greater yields in the longer term. Additional planning permission needs to be taken into
account as generally HMOs need to be licensed and must satisfy certain fire and safety criteria. Effectively managed,
a HMO can generate immediate income, as well as future capital appreciation that the general market could provide.

Throughout the UK, HMOs are becoming increasingly popular, due to several factors such as, the larger migrant
population, plus a greater transitory workforce seeking temporary rented accommodation.
Also home ownership is further out of the reach of young people as a result of increasing property prices and lending
restrictions.

There is a large shortage and great demand for Student accommodation. A university education is now
available for most in the UK and the reputation of our universities amongst overseas students is very high and
together this has resulted in an increasing number of students requiring accommodation.

Ideal areas for HMO investment would typically be close to universities and transport hubs, for example London and
its surrounding suburbs. Sterling Locations can advise on the best areas and properties to invest your money in and
can effectively manage your HMO.

Sterling Locations Limited is a member of the Sterling Group and offers a comprehensive UK property investment
and management service. Our services range from sourcing and acquiring a modest buy-to-let property, managing
this throughout all tenancies, to finding larger buildings ripe for redevelopment, plus offering full project
management and a full “Turnkey” service.

Focus On: Sterling Locations – Global Property Website

Sterling Locations also offer an internet property sales capability for high end residential and commercial property
on a global basis, visit us at:-

Sterling Property Management

Our site has a full property listing of over 1,900 global properties, in 29 countries.

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