Properties provide half of HMO landlords with sole income, Landbay survey finds
Half of HMO landlords in a survey by buy-to-let lender Landbay have said they use their property or portfolio as their sole source of income.
Just under 30% of landlords who took part in the survey owned an HMO (house in multiple occupation) property or portfolio. 72% of these landlords owned HMO properties through a limited company. Half said they did not have another job and used their property or portfolio as their sole source of income.
Despite some of the complexities of managing HMOs, the survey found that nearly half of the properties were self-managed by landlords – a third of whom owned portfolios with over 20 properties. The reason for this more DIY approach could be that the most popular size of HMO portfolio was the smallest, between 4-10 properties, with 34% falling into that category.
The survey found that the highest proportion of HMOs were in London and the South East (47%), followed by the East Midlands.
An HMO landlord commented: “Our company is very happy with our portfolio performance in London and we intend to continue at least for the present.”
Rob Stanton, sales and distribution director at Landbay, said: “Our survey results show continuing confidence in HMOs. Despite proposed rental reforms and local authority licensing schemes, the market remains resilient. With an ongoing housing shortage, demand is stronger than ever for decent and fairly managed house shares.
“HMO landlords have received a boost from falling utility bills. This means higher net rental which can make it easier to borrow a greater amount against the property’s value. In addition, council tax banding for individual rooms in shared houses has been reversed so HMOs are classed as a single dwelling as before.
“As long as investors do their research thoroughly before making the leap, HMOs can give great returns.”