Are more landlords looking at HMOs to deal with tax changes?

Over half of buy-to-let landlords would think about investing in houses in multiple occupation (HMOs) if it helped protect their profits ahead of upcoming tax changes, according to a new report.

The investigation from specialist mortgage lender Kensington was derived with responses from almost 200 landlords.

Growing HMO demand

Kensington has moved to launch a range of new HMO products, looking at catering for increased demand from those looking to take out landlord insurance on these types of property.

Steve Griffiths, director of sales and distribution at the Northview Group (formerly the Kensington Group) said: ‘Earlier this year, Kensington carried out research amongst 200 landlords and found that 55% would give more consideration to investing in HMOs as a result of buy-to-let tax changes.’[1]

‘We believe that demand for specialist products which require a more individual approach will grow as investors look for ways to derive greater value from their investment. Our new range is built to meet this demand and we look forward to working with our specialist distribution partners to make more complex buy-to-let products accessible to brokers, whilst also ensuring that we offer the best possible value to the market as a whole,’ he added.[1]

Are more landlords looking at HMOs to deal with tax changes?

Are more landlords looking at HMOs to deal with tax changes?

Ups and downs

This research comes as two differing reports have painted a different picture of the buy-to-let sector. Research from Connells Survey & Valuation shows that buy-to-let activity has dropped by 13.3% in the course of the last year.

However, a separate report from crowdfunding platform Property Partner suggests that more investors are in the market for landlord insurance, with new listings up by 11% in October. This is likely to signal a buy-to-let comeback over the next few months, with tax changes being fully observed.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/more-landlords-to-consider-investing-in-hmos-to-cope-with-losing-buy-to-let-tax-relief

 

 

 

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