Half of HMO landlords rely solely on rental income

Nearly half (47%) of HMO (house in multiple occupation) landlords rely solely on their rental income for their livelihood, a survey reveals.

The research from buy to let lender Landbay also found that almost a third (30%) of participating landlords owned HMO properties, with 72% of those using limited companies to manage their portfolios.

Despite the complexities often associated with HMOs, the Landbay survey found that nearly half (46%) of these properties were self-managed by the landlords.

A third of these self-managing landlords owned portfolios with more than 20 properties.

The lender says the most popular portfolio size is between four and 10 properties.

Continuing confidence in HMO

Landbay’s sales and distribution director, Rob Stanton, said: “Our survey results show continuing confidence in HMOs.

“Despite proposed rental reforms and local authority licensing schemes, the market remains resilient.”

He adds: “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.”

The highest concentration of HMOs

The survey results showed that London and the South East boasted the highest concentration of HMOs (47%), followed by the East Midlands.

One anonymous HMO landlord told researchers: “Our company is very happy with our portfolio performance in London, and we intend to continue at least for the present.”

Mr Stanton added: “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.”