Latest Insights On The Hereford, Worcester and Gloucester HMO Markets
After nearly 18 months of uncertainty due to the COVID-19 pandemic, many HMO landlords have felt understandably overwhelmed or anxious. In particular, occupancy has been a worry across the HMO market.
With the student market, there were students across the UK who weren’t actually going to university in-person. And in the professional market, many workers began working from home, and there has been uncertainty surrounding jobs and the economy as a whole.
On top of that, some tenants have been wary about moving into a house with four or five other people they don’t know during the pandemic.
Because of these factors, some HMO landlords have had empty rooms and properties. But a number of recent reports indicate demand is returning across the UK rental sector, including the HMO market.
Here are some of the latest insights on the Hereford, Worcester and Gloucester HMO markets!
Demand Is Picking Up
The pandemic has put many people’s moving plans on hold. A recent poll of more than 1,000 SpareRoom users showed that 53% have been put off of moving because of COVID-19.
The main reason was due to not feeling safe. Others felt the current landscape was too uncertain to plan ahead, and some had lost their jobs or were furloughed.
However, of those who were put off moving, 54% now plan to move in the next six months. And 24% plan to move in the next year. This suggests confidence is growing and the market is picking up again.
Another poll of 12,000 renters by SpareRoom revealed 80% said they were planning or thinking about moving. And 76% of those moving stated they’re planning to move to a completely different city or town.
As lockdown restrictions have eased, tenant demand has been on the rise. With light at the end of the tunnel, more people are starting to plan ahead. And during the next quarter, demand is forecast to increase further within the HMO market.
Professionals Returning to Cities
As lockdown restrictions have eased and offices are starting to reopen, demand for rental properties in cities has started to rise again, especially among professionals.
With the furlough scheme only ending on 30 September, this could yet cause uncertainty for some professionals in the coming months. But overall, the UK economy is faring much better than originally expected.
Student Demand Remaining Resilient
Despite COVID-19 disrupting much face-to-face teaching this past year, demand for student housing has remained remarkably resilient throughout the pandemic. Certain areas in particular were home to consistent demand, helping some HMO landlords to maintain rental yields.
Data from UniHomes reveals landlords with properties in certain locations were even able to achieve higher rental yields since the start of the pandemic. For example, the average rental yield for properties near the University of St Andrews, Aberystwyth University and Lancaster University all saw increases of 1% or higher.
As living away from home is a big part of the university experience, appetite for student HMOs is set to grow, especially as the start of the next university year nears and because of the bad press that purpose-built student accommodation received throughout the pandemic across the UK for a variety of reasons.
Location Is Key
Location is everything when it comes to property, but especially HMOs. It determines supply and demand, how desirable your property will be, rental strategy profitability and long-term capital appreciation.
To build and manage a sustainable HMO portfolio, you need to get the location right to attract the right tenants to your properties. Keep in mind that it’s often better to have the best house on the worst street, than the worst house on the best street.
It’s impossible to know what the coming months and rest of the year holds. No matter what happens, make sure you have the right structure in place for your HMO business, so you can prepare for whatever is thrown your way. With this in mind, how and who you decide should manage your HMOs is obviously a big consideration and one that is imperative to get right.