HMO investment surge in the North West

There has been a huge increase in the number of investors acquiring Houses in Multiple Occupation (HMOs) in the North West of England in the past five years, according to a property investment firm.

The Mistoria Group reports that the number of investors buying HMOs has increased by 89% since 2010. 

Using its own data, the firm also calculates that every £1,000 invested in HMOs in the North West in 2010 would have grown to £2220 by 2014, while for a standard buy-to-let property this would have reached £1,770, a difference of £450.  

It also says that average total gross rental yields for the 2010-14 period for HMOs in the North West were 14%, compared to 9% for a standard buy-to-let property.

Mistoria also claims that HMOs rented to young professionals and students had a total geared return on equity (ROE) of 122% over four years, compared to 77% for a standard buy-to-let property (with a 75% loan-to-value mortgage).

"We have experienced a sharp increase in demand from investors looking to acquire HMOs for professionals and students over the last four years,” says Mish Liyanage, managing director of the Mistoria Group.

“A key driver for the rise in demand for HMO student property is partly down to the huge growth in student numbers over the last few years. According to UCAS, the domestic student population is continuing to expand, with an expected all-time high of 500,000 applications this year.”