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HMOs are traditionally run by more experienced landlords as they tend to be more hands-on than regular buy to let properties. However, research carried out by a leading mortgage company has found that the number of landlords looking into buying an HMO has risen by 10% over the last six months.
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“With higher yields it is no surprise that there has been a sizeable shift towards the more complex property types,” says the managing director of Mortgages for Business.
More Landlords Interested in Commercial Properties
The same survey has also found that more landlords are looking at investing in commercial properties, as these are not affected by the chancellor’s 3% stamp duty surcharge.
The Stamp Duty Effect
The figures show that, as expected, the hike in stamp duty has had an effect on the private rental sector. The number of landlords considering expanding their property portfolio has dropped from 46% in November last year to 41% in May of this year. Landlords are also more likely to hang on to their properties now – 18% were looking to sell last November whereas only 14% are thinking about selling now.
“It is positive to see that fewer landlords are looking to sell property and shrink their portfolios and that a large proportion are still seeing the benefits of re-mortgaging,” comments David Whittaker from Mortgages for Business.
“After the government’s tax crackdown on private landlords I can understand why investors are being more cautious about expansion. It will be interesting to see how long this cautious approach will last.”
