Annual HMO yields rose from 9.1% in Q4 2015 to 10.2% in Q1 2016, outstripping vanilla buy-to-let (5.8%), multi-unit freehold blocks (7.8%) and semi-commercial property (8.1%) returns.
Typical returns on HMO properties exceeded 10% in the first quarter of 2016 – outstripping all other property investments.
Annual HMO yields rose from 9.1% in Q4 2015 to 10.2% in Q1 2016, outstripping vanilla buy-to-let (5.8%), multi-unit freehold blocks (7.8%) and semi-commercial property (8.1%) returns.
David Whittaker, managing director of Mortgages for Business, said: “With tenants looking for less expensive accommodation and landlords looking for higher yields it is no surprise that the number of HMO purchases has risen in the last quarter.
“Even though remortgage transactions were higher this is not to say purchase numbers were down. All types of residential investment showed a marked increase in the number of purchase transactions as investors rushed to beat the 3% stamp duty surcharge deadline.
“I would expect to see the number of landlords purchasing semi-commercial property to rise in the coming months as mixed use properties are technically classed as a commercial premises and as such will not be liable for the 3% stamp duty surcharge.”
In the first quarter of the year the number of limited company products rose to 1,105, up from 963 in the final quarter of 2015.
