Many Landlords Set to Rebalance Portfolios

Tuesday, September 24th, 2019

According to data collected by specialist lender Precise Mortgages for the second quarter of 2019, Houses of Multiple Occupation (“HMOs”) returned rental yields of approximately 6.3 per cent when compared to the market average for all buy to let property which was around 5.5 per cent.

Although there may be many reasons that drive more landlords to add HMOs to their property portfolio, the promise of higher returns in a market producing rental yields which are at their lowest for nine years is of course very alluring. Alongside that, it is also believed that many landlords will be planning to sell their buy to let terraced houses in the coming months as part of their portfolio rebalancing process.

Additionally, the data collected also indicated that (i) landlords with between 11 and 19 properties achieved, at around 5.9 per cent, the highest average portfolio yields and (ii) landlords with buy to let property in the North West of England also enjoyed similar yields.

HMOs, an Attractive Proposition for Landlords?

Here at Caboodle Finance, given that the current period of significant market uncertainty is likely to continue, at least in the short term, we believe that HMO properties also represent an attractive proposition for those professional landlords who wish to minimise the risks associated with void rental periods given that as HMOs have multiple tenants, overall rental income is potentially more secure should one tenant leave.

Whilst the HMO sector has seen rapid expansion in recent years, in our view, experienced landlords will continue to carefully rebalance their portfolios in order to maximise yields and to offload any properties that may be potentially problematic.

HMO Buy to Let Mortgages

Specialist buy to let mortgage brokers can assist landlords to locate the best HMO buy to let mortgage in all the given circumstances. Lenders will always want to consider the relative experience level of an applicant, the characteristics of any existing portfolios and of course the nature and location of the target property, and an expert broker can help guide you throughout the process.

If you would like to understand more about how the professional advisers here at Caboodle Finance of Sutton Coldfield, Birmingham could help you assess whether a buy to let HMO strategy is right for you, speak with one our team today by calling us on 0800 151 2407 or alternatively, just complete our online enquiry form by clicking the link HERE .

We look forward to hearing from you.

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THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. CONSOLIDATING DEBTS MAY INCREASE THE TERM AND TOTAL AMOUNT PAYABLE.

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Caboodle Financial Services Ltd, registered in England at SQ2 House, 240b Lichfield Road, Four Oaks, Sutton Coldfield, West Midlands B74 2UD (number 08044670).
Caboodle Financial Services Ltd is an appointed representative of PRIMIS Mortgage Network (PRIMIS), a trading name of Advance Mortgage Funding Ltd which is authorised and regulated by the Financial Conduct Authority. PRIMIS is only responsible for the service and quality of advice provided to you in relation to mortgages, protection insurance and general insurance products. Any other product or service offered by Caboodle Financial Services Ltd may not be the responsibility of PRIMIS and may also not be subject to regulation by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let.

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