Happy Friday all, welcome back to lockdown! This time things do feel different; the housing minister has been clear that it is ‘business as usual’ and we will be doing all we can to keep it that way.  We have been working from home since March so nothing changes for us! 

This week I want to talk to you about some options for your HMOs. There has been talk in the industry that the boom of HMOs is over, of which I disagree! In the HMO market we are seeing the need for diversification, though.

During these times we are seeing that tenants are becoming less likely to want to share facilities if they can afford the a choice. HMOs for professionals are perhaps less popular as people are working from home more, aren’t travelling for work and don’t need to be in a specific place. So what else could you use your HMO for? 

Longer leases for the whole property 

This is an area that has traditionally been tricky to obtain lending, but as banks crave certainty as much as landlords in such an uncertain market, things are changing. It has been a contentious issue for some time, but we are now seeing a change in lender appetite, allowing longer leases as well as vulnerable tenants in the property.

There are certain caveats to the lease, but we are able to have the draft lease checked by the lender’s legel team prior to submitting the application.  This allows you to have a level of certainty from the beginning. 

The product is available on a standard HMO interest rate, so you aren’t paying a premium, and you don’t need any specific experience as long as you have had an HMO for more than 12 months.  This really has opened up a new option! We have completed cases using this scenario and it is a straightforward process.  I would suggest engaging with your provider early on.  You need to understand what they need from a property in terms of facilities and location to ensure that you don’t spend money before you know it’s a viable option.

The student sector

Six months ago as we entered the first lockdown we were worried about what was going to happen to student let’s and some lenders even stopped allowing them entirely. What we have seen since September, however, is very different.

We are seeing students who are craving some sort of normality moving into their new homes as planned. We are also seeing students preferring a shared home rather than student accommodation, and wanting to commit for two years rather than one to create some stability.  

Lenders are back in the market after this shift, and so it may be worth thinking about this as an option for next year if your location allows.  As always, diversification is key, and we are seeing this through a variety of methods; different types of property, alternative locations and thinking outside the box for lease or tenant options. 

As always, we’re here to let you know how this could work for you so give us a call to discuss it further.

Stay safe, and try and enjoy your first lockdown weekend! 

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