Lee Grandin, managing director of Landlord Mortgages has reacted to the recent comment on Homes in Multiple Occupation* (HMOs) from the Royal Institution of Chartered Surveyors (RICS):
“When HMOs became mandatory in April 2006, many industry pundits predicted that this would cause rents to rocket and landlords to leave the market in droves. However, almost six months on, we have not seen this pattern emerging; despite recent comments from RICS.
“When this legislation was introduced, we predicted that the regulation would only affect selected areas of the buy-to-let market and the RICS figures which suggest that only 3% of rental properties are let on this basis, support this statement. However, while we be agree with this aspect of the release, we believe that it overemphasises the impact this legislation has on the market.
“In you review the background data for this RICS release, you will see that 85% of agents nationally believe that following the HMO regulation there has been little or no impact on rents. This would suggest that landlords have not been hit by massive costs for HMOs as otherwise they would have passed this on to their tenants in the form of increased rents!
“Of course some types of property will be hit harder than others. Student property is likely to be a cause for concern from a HMO point of view as the properties will tend to be larger. Landlords will have to be diligent in this market to make sure that they are compliant with the rules.”
