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HMO Buy-to-Let Investments Offer Best Stability

September 2, 2015 | Landlord News  

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The government response to the petition, which now has over 24,000 signatures and calls for a reversal to the planned tax relief changes for buy-to-let landlords, was to stand behind their proposals.

The statement from HM Treasury said: “By unifying the treatment of finance costs for all individual landlords, the Government is reducing the distortion between property investment and investment in other assets, and reducing the advantages landlords may have in the property market over ordinary homebuyers.”

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Although the government say only one in five landlords will be affected, many are concerned about the possible loss of income that may result. According to a specialist property investment firm, houses in multiple occupation (HMOs) are the most stable and profitable form of buy-to-let investment, and therefore offer the best protection against future tax changes and interest rate rises.

Their data shows that the average monthly rent in the buy-to-let market in 2014 was £754. But the average monthly rent for an HMO property was £3,298. Their analysis suggests that the maximisation of income from a given size of property by letting each room on an individual basis – generally aimed at young professionals and key workers – can generate returns up to four times higher than for a standard BTL property.

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