As a landlord, you are probably aware that more people than ever rent a property rather than own. This is due to affordability, lifestyle choices and wanting to free up income for investment opportunities.
If you’re an HMO owner, then the pandemic has likely impacted you with extra commercial cleaning to common areas, undertaking socially distanced property inspections and dealing with changed eviction notice periods.
We believe HMOs are still a solid investment, even during COVID times, as they are an attractive accommodation choice for people wanting shared houses.
However, its interesting to see what the HMO market will look like, post-COVID. Below we’ve listed three trends that may impact the HMO market post-COVID.
Trend 1: Working from home
Working from home has been an ongoing trend during the pandemic with attitudes regarding working from home improving substantially.
One question you may be thinking, is whether most people will continue to work from home after most of the population has been vaccinated?
A recent survey undertaken by VoxEU.org of 5,000 working UK people found that after COVID, in 2022 and beyond, 79% of British employees want to keep working from home at least two to three days a week. This means even after they are vaccinated or after COVID has been suppressed, they want to work from home.
Interestingly, this indicates that employees who have been vaccinated may not be comfortable returning to the office their workplace and would prefer to work from home for part of the week.
Trend 2: Locations away from London may be more attractive
According to BBC analysis of searches undertaken on Rightmove, it has been observed that people are wanting to leave the traditional inner-city locations in favour of commuter zones and small towns to take advantage of the remote working trend.
The results show that Cornwall and Cambridge have overtaken London as the most searched locations, with neighbouring Devon in third place. Interestingly, Dorset has moved from 20th to 10th position.
Trend 3: Accommodation incentives
A recent survey by Knight Frank indicated that tenants are focused on the ‘internal’ benefits of the property more than the ‘external’ factors. This means they value the size of rooms and the amount of light more than the proximity to transport or local shops.
Although the minimum size of HMO bedrooms is mandated, there is an opportunity to provide larger rooms or rooms with desks, to appeal to people who may continue to work from home.
What does this mean for the HMO market?
From recent surveys undertaken, it appears that the trend is for at least 50% of UK employees to continue to work from home two to three days a week, even after getting vaccinated or even after COVID has been suppressed.
This combined with potential rental prices falling in London may provide an opportunity for buy-to-let landlords and HMO landlords to invest in smaller towns north of London and the South East.
Our clients have seen a positive return on investment with their HMOs, with some achieving a 3 to 4 times increase in monthly rental income, compared to a single property.
Fundamentally, it seems that HMOs will continue to be a good investment if it is in the right location and provides attractive accommodation features (larger rooms with desks) to make working from home comfortable.
At REKA Property Management, we help manage our clients’ property and help landlords keep up to date with health requirements.
If you want peace of mind with your property, call us on +44 (0) 203 286 6468 or email us at Admin@RekaProperty.co.uk