This Estate Agents in Leeds has seen a spike in demand for HMO investing and mortgage requests

This Estate Agents in Leeds has seen a spike in demand for HMO investing and mortgage requests

Private Rentals and HMO – A glimpse back in time

Over the last few years, the UK private rentals and HMO – houses in multiple occupations – sectors have ballooned strongly. The primary reason is the affordability problem stemming from the house price increase in stark contrast to underperforming wage growth. 

For most people not in the property loft, rental and HMO are the only viable options. However, a school of thought also suggests a mounting indifference and apathy to property/house ownership among the age groups of 21 to 35, most significantly in the UK capital. 

In 2018, even before Covid hit, the government estimated that about 4.7 million people were within the private rented sector in England only and approximately 497,000 HMOs in England and Wales. The situation is even more inflated after Covid-19 partially halted wage and employment growth. 

How HMO’s in Leeds has become the next “golden nugget” for Investors? 

The recent demand for HMO’s in Leeds has caused a stir in the local market. The capital of Yorkshire has been one of the front runners of HMO investment due to its large student population. In addition, Leeds has enjoyed an 8.6% capital growth in the past five years and has continuously ranked at the top for affordability and high standard of living, and rented terraced house prices.  

According to local property experts, Dwell, Leeds has become the next “golden opportunity ” for investors. Jon – The Director of Dwell says, “The spikes we’ve seen in HMO investment and mortgage requests were quite incredible. The most sought-after areas for HMOs in Leeds are still Headingley and Horsforth, followed by Hyde Park and Woodhouse.”  

HMO rental yields and managing tenants 

The renting market has never been more competitive, with HMOs offering higher yields than standard buy-to-lets. As a result many multi-let properties offer great opportunities in terms of gross profit on investment (especially if you know what you’re you’re doing). However, managing tenants can be challenging as HMOs require a certain level of expertise in other areas, too such as legalities. Dwell offers a fantastic 360 degree solution for landlords to reach full potential with their investment.  

Addressing the Housing Scarcity 

The government has realised that there is a chronic shortage of housing properties; hence, they set out to build 345 thousand new homes annually in order address this issue.

The specified target has never been met and is unlikely to be completed. However, local authorities and investors recognise an essential growing need for PRS and HMO housing because councils have lost most of their housing portfolios and now rely on private landlords. 

HMO Licenses 

There rises a need for the licensed HMOs to comply with strict regulations to ensure the units meet minimum safety and quality standards – thus boosting the quality of rental housing stock. Dwell-Leeds can see that what is happening in Leeds is that the shifting reputation and interest in HMOs for renters, along with the potential boosted gains for investors, mean that this growing sector will continue the tremendous surge and develop further. But, at the same time, there remains a shortage of affordable properties for first-time buyers. 

What’s the deal with HMO mortgages?

The idea of an HMO mortgage is to make it easier for landlords who rent out their property, as this type of loan caters explicitly towards people with multiple tenants from different households. 

It sounds like the perfect mortgage for landlords! For those who want a low-interest rate and flexibility, an HMO linked to England’s Bank of England base rate would be just what you need. The maximum LTV ratio on these types is typically between 60% – 70%. Plus there are no additional fees.


HMOs aren’t risk-free, but they are well worth it, especially if you are guided by property experts such as Dwell-Leeds. 

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