Multiple Occupancy Homes (HMOs) have long been a popular way for landlords to increase their returns. What effects will the Covid 19 pandemic have on tenants’ demand for shared living space in the future?
The first thing to keep in mind is that HMOs pose no greater risk than a single household when it comes to Covid-19, according to government data.
Residents are asked to follow general stay at home guidelines and act like a single household if someone has symptoms of coronavirus. The only additional guidance is that it is recommended that all shared areas be regularly cleaned and well ventilated.
If we emerge from the pandemic, HMOs are unlikely to be tarnished by any particular stigma, and there could even be a surge in demand.
Student accommodation is what makes up a lot of HMOs, and with many courses currently being conducted remotely, it is likely that many people hold back on the way to university until they can fully appreciate the full student experience.
This means pent-up demand for university places as restrictions begin to ease and increased demand for HMO accommodation.
In addition, HMOs provide an important form of affordable housing, and affordable housing is needed by many workers suffering from unemployment and declining income as a result of the financial consequences of the pandemic.
Additionally, while an increase in homework has led to an exodus from the cities, it is likely that people will need to be present when offices are reopened, even if only for a few days a week.
A room in an HMO could therefore offer office workers a flexible and affordable way to balance their new lifestyles with city responsibilities.
So there are signs that HMO properties will continue to attract renters, and there could even be a shift to upscale properties if there is a trend for office workers to adopt HMO crash pads.
Investors buying a property to rent out as an HMO usually need to do some work to make the property fit for purpose, and bridge-to-let products could help them establish a successful investment for the future.
The initial bridging loan can be used to buy the property and get the work done before moving to a longer term mortgage once the work is complete and the building is ready to be rented.
HMOs provide a flexible and affordable form of housing that is critical to their continued popularity.