And this is especially apparent when it comes to HMO’s.
Higher rental yields have certainly attracted landlords towards HMOs in the past and with an increasing number of properties being built or converted which provide comfortable, cost-effective solutions for tenants of all ages, HMOs will continue to prove attractive.
The appeal of such yields was further highlighted in our recent research with nearly 900 landlords in conjunction with BVA BDRC, which took place between March and April this year, which suggested that HMO lettings continue to generate significantly higher average rental yields compared to other property types (7.5%).
Breaking this down, individual units within flat blocks and bungalows were reported to generate the lowest average rental yields at 5.8%.
To meet the ongoing demand for HMOs, we have recently launched (May 2021) new standard (up to six occupants) and large HMO/MUB (over six occupants) five-year fixed rate mortgages at 75% LTV.
The standard HMO/MUB product is priced at 3.79%, while the large HMO product is available at 3.89%. ICR is calculated at pay rate on 5-year fixes at Foundation, and these come with a flat £1,495 fee so should appeal to those landlords who want larger-value, higher-yielding properties without the initial cost of a percentage fee. Each product is available to individual landlords as well as limited companies.
So, if you have landlord clients who may be looking to add an HMO to their portfolio or refinance an existing HMO property, then why not speak to our team to see how our new product range might work for them.
FOR INTERMEDIARIES ONLY