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.”

Join our mailing list:

Leave a comment



Latest Comments

Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

view article
maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

view article
maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

view article
zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

view article
Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

view article
Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

view article
RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

view article
sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

view article
Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

view article
Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

view article
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.

view article
Samantha Goodman
Samantha Goodman 11 Aug 2017

Interesting point of view.

view article

Related stories

More articles from Landlords