More property investors looking to diversify their portfolios
Brokers see interest growing in Houses in Multiple Occupation
New research by specialist lender, OneSavings, claims that in the last six months, over half of brokers in the UK have met with landlords who are keen to diversify their property portfolios. This includes a rise in the number of investors interested in student property.
Of the brokers surveyed, 51% had seen an uptick in interest from landlords looking to expand into other property sectors. Of these, 56% of landlords wanted information about investing in Houses in Multiple Occupation (HMOs).
Onesavings suggests this growth in interest is being driven by the higher yields that landlords can expect from HMOs, which would cushion them from the increased costs levied against landlords in the last year.
Student accommodation, which is usually all HMOs, is generating some interest. Although it still remains the investment of choice for the connoisseur: 6% of brokers replied to say landlords have enquired about student investments.
Sales Director at OneSavings Bank, Adrian Moloney, says:
“Landlords are on the hunt for greater yields, and, in the face of regulatory and tax changes, diversifying into commercial property or more complex residential options such as HMOs can offer this.”
Shift towards multiple properties
Meanwhile, the changes to landlords’ finances seem to be creating a shift in the market towards landlords with multiple properties.
This comes from research carried out by buy-to-let Mortgage supplier, Paragon.
The research shows a shift away from the middle ground, with the proportion of landlords with between three to five rental properties dropping from 26% to 24%, at the end of 2017.
Meanwhile, landlords who own between six and twenty properties has risen from 35% to 39%.
Paragon suggests that the movements in the market is being driven by the changes to the financial laws governing the sector. In fact, the report also shows that the amount that the proportion of rental income that landlords are spending on mortgage costs has risen from 26% to 30%, at the end of 2017.