HMOs set to be top investment in 2016

Houses in multiple occupation are likely to be the most popular property type for property investors this year, research from Shawbrook has claimed.

A survey of the bank’s clients looked into the outlook for 2016 from property professionals and the expectations they have for their own investments.

A third of investors cited HMOs as their most preferred property type, an increase which has more than doubled from 16% in July 2015.

The latest figures also revealed that terraced housing is now the second most preferred property type for property investors (28%), followed by flats and maisonettes (22%).

Karen Bennett, sales and marketing director of commercial mortgages at Shawbrook, said: “We’ve seen a surge on interest in HMOs over the past year and our recent broker and client barometers confirm a big appetite in the market.

“This asset class has undergone significant change over the past decade with some very clear tenant and investor profiles emerging to bring some real quality to the sector.

“Whilst the high yields make for an attractive investment, caution must be taken with regard to planning and licensing requirements, along with the challenges and pitfalls of the valuation process. “Working with a professional broker is a sound strategy in order to take advantage of the opportunities on offer for borrowers looking to expand into this market, and their knowledge and experience bring a huge amount to the table when trying to achieve a good outcome for the borrower.”

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