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Many BTL (buy to let) landlords are moving over to HMO investment, as they struggle with increasing regulation and taxation changes.

When compared to standard buy to let, HMO investment can offer a higher yielding option  and many lenders are now recognising this and offering finance products for HMO property investments.

Recently Leeds Building Society announced that it is now including five-year products in its bespoke HMO mortgage range. This move came after landlord clients were looking for additional five-year options for small and large HMO property investments, as growing numbers sought to diversify their portfolios and move into this sector.

Houses in multiple occupation (HMOs) are nothing new, but with affordability issues continuing to influence on first-time buyers and rents sitting at high levels, it’s well known that a lot of people are staying in accommodation such as house shares for longer, well beyond their student years.

Glide’s study looked further into house shares, highlighting that London remained the best location in terms of the variety of house share opportunities, with over 19,000 rooms available. Nevertheless, the capital ranked 17th overall as the best city for house sharers, with the average monthly rent six times higher than the most affordable city to live in (average rent in London was suggested to be £3,278 pcm, compared to £499 in Bradford).

Ranking the biggest UK cities on a range of measures – Bristol came out on top. The rest of the top 10 consisted of: Nottingham, Birmingham, Manchester, Liverpool, Derby, Southampton, Brighton and Hove, Leicester, and Portsmouth.

Landlords looking to get into HMO property investments need to be ready to meet legislation changes as well as local licencing requirements when operating within this space. But, with increasing numbers of lending options becoming available, this is certainly an area worth considering.