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HMO property continues to deliver the best yields

HMO properties produced the highest yields in the first quarter of 2018, at 7.1% - 1.3% above the market average, according to fresh research from Precise Mortgages.

Yields on multi-units, such as blocks of flats, came a close second in Q1 2018, generating an average yield of 6%.

Across all property types average yields fell marginally in Q1 2018 to 5.8% from 5.9% in the last quarter of 2017 and are now at the same level as Q1 2017.


Professional landlords continue to achieve the highest yields, reflected by the fact that those who currently own a portfolio of between 11 and 19 properties are achieving an average yield of 6.7%.

By contrast those who own just a single property achieved yields of 4.8%.

On a regional basis, landlords with portfolios in the North West reported the highest rental yields at 6.7%.

Somewhat unsurprisingly, landlords with central London portfolios achieved the lowest average yields at 4.8%.

Alan Cleary, managing director of Precise Mortgages, commented: “As HMOs attract multiple tenancies, gross rental income tends to outstrip single lets and rental income is more secure even if one tenant leaves a void.

“Experienced landlords are looking to rebalance their portfolios and there is a real opportunity for brokers to support them to work with specialist lenders who are prepared to be flexible and have expertise across the widest product set.”

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    car insurance is high for young drivers, why? because of risk, same applies to the hmo tenant.

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    It doesn't matter whether HM0 is high yield or not I hate the whole 1960's Slum concept of living in rooms, very often washing, showering, cooking, living with cooking smells, increased risk of fire due to people cooking in rooms if not every-room in some cases, each one potential a serious hazard etc.


    Never got involved with HMOs, and never will.

    • 17 December 2019 21:14 PM

    Totally agree with you.
    The maximum facilities that one bedroom should have is an en-suite facility.
    Any other activities beyond that of sleeping and bathing should be carried out in common areas.
    That potentially makes HMO viability less profitable.
    If that is the case so be it.
    Anything other than sleeping or bathing is a hazard especially in a relatively small bedroom.
    The current minimum HMO conditions are NOT fit for purpose.
    They currently facilitate squeezing in too many rooms that are really unsafe.
    I also believe there should be a minimum size common area for an HMO.
    So at least one large room size area to be used as a lounge.
    I appreciate that such a common area may not be used much by the occupants but that is not the point.
    At least it would be there!
    Enhancing HMO regulations I appreciate would make lots of people homeless.
    That would be just TOUGH!!
    Rather have homeless than people living in dangerous conditions.

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    Your are hot on the key board tonight Paul, happy Christmas mate.

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    • 17 December 2019 21:20 PM

    I hope one day very soon not to have to bother.
    I can't wait to stop being an AST LL.
    Until that very happy day I have to keep up to date with things.
    A LL can't afford to be ignorant.
    Returns of the year to you as well.
    May all LL have a pleasant Christmas!!


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