The Leeds Building Society’s latest study has found that landlords letting houses in multiple occupation (HMO) are continuing to benefit from the highest rental yield.
The research revealed the typical rental yield for HMOs was 6.9%, higher than the average rental yield of 5.8% across all property types.
The Leeds launched a bespoke mortgage range for HMOs in January 2019. At the time of launch, the Society was the only lender to offer specific products tailored to small and large HMOs based on planning and licensing requirements to support landlords in the ever-evolving buy-to-let market.
Matt Bartle, Leeds Building Society’s director of products, said: “The research confirms the importance of HMOs for landlords looking for higher rental yields. Increasingly, landlords are turning to this specialist area, which is a well-established part of the private rented sector, particularly in university towns and urban areas with higher housing costs.
“HMOs form a part of a healthy housing market and we used our extensive buy-to-let experience to develop our unique proposition. In addition to the bespoke products and specialist valuations we offer, we’ve enhanced our lending criteria to align with planning and licensing requirements for both small and large HMOs.
“We continue to review our product range to ensure our proposition meets the needs of borrowers who are currently under-served by the wider market.”
Multi-unit blocks of flats (6.3%) and semi-detached homes (6.1%) were the other types of properties to deliver rental returns above the average rental yield.