Hello Readers

What a couple of weeks we have had, and the Burnham premiership has also started with some nerve-settling news that rent controls are not on the table.

This is great news and perhaps means the government has seen sense for a change, as it’s been proven that all rent controls do is mean that landlords increase rents each year by the maximum available amount and supply constricts, pushing up rents for newly rented properties… a bit of a ‘hurrah’ moment for a change.

In addition to this piece of good news, it looks like more landlords are buying property than selling for the first time since 2019! There was a spike leading up to the implementation of the Renters’ Rights Act, but for June we saw how 9% of homes listed for sale had previously been advertised for rent, whilst landlords accounted for 10% of all purchases in June. Ok, so just one percent for one month doesn’t represent a trend, but it’s one to keep an eye on that’s for sure!

Regardless of this positivity, there is still a supply issue within the rental market and personally, I think HMOs play a big part in being the answer but with the rise in Article 4 legislation (including within Medway) and increased operating costs elsewhere, landlords are continuing to turn to higher spec properties not to just remain competitive, but also increase their returns.

I have been reading some research by Paragon and it’s actually shown some very interesting (helpful) headlines. I’ll start off with the headline findings from a survey of landlords as their research highlighted how:

• Over eight in ten landlords agree that HMOs offer better rental yields than other residential letting properties
• Almost eight in ten landlords believe HMOs deliver more profitable returns
• Only around a quarter of landlords think HMOs provide better capital gains compared to other property types

When letting an HMO, their research highlighted some interesting stats around location and quality, with:

• 25% of landlords prioritising ensuite bedrooms
• 19% favouring locations close to work hubs or transport links
• 19% aiming for large-sized bedrooms
• 23% having energy efficiency on their wish list

This reflects my experience, as higher spec properties tend to attract better tenants, who stay longer, look after the property better and are simply easier to deal with.

For me, this confirms what I have always known and that’s how HMOs should be high spec, well managed and exist to bring strong returns that can then be re-invested into expanding portfolios. What’s your thoughts on this?

If you are an investor looking to expand or invest for the first time in an HMO or for the first time within the Medway Towns, I’d be more than happy to help. The best place to start would be booking a discovery call, where we can discuss your requirements and questions in more depth – you can find more info about this here.

Alternatively, do drop me an email on hasan@home-share.co.uk and I’ll be happy to help!

Hasan