Which is the preferred property type for investors in 2016?

Which is the preferred property type for investors in 2016?

The latest data from Shawbrook, which examined the outlook for 2016 from property professionals and the expectations they have for their own investments, has revealed that HMOs are predicted to be the most popular property type for property investors this year.

According to the data, over a third (34%) of investors cite HMOs as their most preferred property type, an increase which has more than doubled from 16% in July 2015. The latest figures reveal that terraced housing is now the second most preferred property type for property investors (28%), followed by flats and maisonettes (22%).

It seems that property professionals are still working hard to understand the nuances of the HMO space, in particular with regard to valuation, planning and licensing, with over 50% of those surveyed finding these complex areas an ongoing challenge. Overall, over two fifths (42%) of those surveyed currently have an HMO property in their portfolio while a further 46% wish to enter or expand into the HMO market.

The high potential yields of HMOs are seen as an attractive proposition for property investors in the UK. Nearly three quarters (72%) of investors cited yield as the main attraction for investing in an HMO followed by the potential for capital growth (29%). Reduced risk of rental voids, compared to standard buy-to-let properties is also seen as an attraction for investing in HMOs in 2016 (18%).


Karen Bennett, Sales & Marketing Director of Commercial Mortgages at Shawbrook says: “As a lender, we’ve certainly seen a surge on interest in HMOs over the past year and our recent broker and client barometers confirm a big appetite in the market. This asset class has undergone significant change over the past decade with some very clear tenant and investor profiles emerging to bring some real quality to the sector.

Whilst the high yields make for an attractive investment, caution must be taken with regard to planning and licensing requirements, along with the challenges and pitfalls of the valuation process. Working with a professional broker is a sound strategy in order to take advantage of the opportunities on offer for borrowers looking to expand into this market, and their knowledge and experience bring a huge amount to the table when trying to achieve a good outcome for the borrower.”

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Christian Donovan
Christian Donovan 18 Aug 2017

The write-down on house values, combined with the fall in the GBP saddled the fund?s property portfolio with a 1.4% loss in the second quarter. The shocking amount of $240 million.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

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Samantha Goodman
Samantha Goodman 11 Aug 2017

It depends on the people, some older adults decide to make a long-distance move in order to live closer to their children or settle in a place with a lower cost of living.

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brandonlee10
brandonlee10 24 Jul 2017

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

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Jo Mullett
Jo Mullett 07 Jul 2017

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NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

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Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

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Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

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jason hadzikostas
jason hadzikostas 28 Jun 2017

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