Spotlight on London: Influencing the Capital’s Expanding HMO market
15 March 2018 1017 Views
While rental growth may have slowed in London over recent months, the appetite to invest in HMO properties across the capital has not. London is said to house 40% of the country’s total HMO market, and with 1.8 million young professionals living in the city there’s little question as to who is fuelling the growth.
With spiralling house and rental prices over the past decade, HMOs have become a popular choice for young professionals, in fact a new survey commissioned by Glide suggests that a fifth of all young professionals in the capital live in privately shared accommodation. Glide, one of the country’s leading multi-tenant billing companies for people living in shared accommodation, commissioned the research to analyse the capital’s HMO market and better understand HMO landlords and the challenges they face.
The research found that there were more HMOs in inner London, 122,000, than outer London, 92,000. The boroughs of Hackney, Ealing, Brent and Southwark had the highest density of HMOs, with each one housing in excess of 15,000 properties. Despite a tendency for people moving to outer London suburbs to buy or rent solely, and share accommodation centrally, there are a few exceptions. Notably, the central boroughs of Kensington & Chelsea, and Tower Hamlets had fewer than 7,500 HMO’s, while Enfield, which is on the outskirts of the city, had up to 15,000 HMOs. Useful insights for landlords looking to invest in the capital.
Landlords should also note that the property search time in the capital is far less than the rest of the UK, with the majority of young professionals, 69%, starting their search just 1 – 2 months before moving date. They’re also less likely to use letting agents in their property search, with just 13% opting to do so. In the main, young professionals in London use Spareroom and other aggregator sites to find a place to live, with over half, 52%, preferring this method.
There is a small window for London HMO landlords to attract the best tenants online so it’s essential they get their offering spot on. Glide, who was the first company in the UK to offer multi-tenant billing for people living in shared accommodation, believes there is a huge advantage for London landlords to offer bills inclusive rates. While 52% of HMO landlords, who responded to the survey, do offer bills inclusive rates, wider research suggests this figure could be a lot less, and even at 52% this is still significantly lower than HMO landlords across the rest of the UK.
Glide found that landlords offering bills inclusive rates tended to self manage the process, but find the task massively stressful and would prefer to deal with fewer suppliers. Those that were opting not to offer bills inclusive rates cited concerns about tenant over-usage and administrative burden as key barriers. Glide exists to take the pain and stress out of utility bills, providing landlords of shared households with one single bill to cover all utilities across their entire portfolio, making it easy for them to offer all-inclusive rates to their tenants. Their mantra is ‘Hate Bills, Love Glide’. This approach, together with their technologically advanced billing infrastructure, and focus on innovative packages such as ‘risk free bills inclusive’, has earned Glide its market leading position.
Glide has recently acquired Huru, a London based multi-tenant billing start-up, to strengthen the company’s proposition in the capital.
Distribution of HMOs, by London borough
Note: 1) Data for 2015-16 (year end March 2016) has been used as 16-17 data is currently incomplete.
Source: Local Authority housing statistics.