Leeds leads HMO and private rental surge

Over the last few years, the UK private rentals and HMO – houses in multiple occupations – sectors have ballooned strongly.

The primary reason is the affordability problem stemming from the house price increase in stark contrast to underperforming wage growth.

For most people not in the property loft, rental and HMO are the only viable options. However, a school of thought also suggests a mounting indifference and apathy to property/house ownership among the age groups of 21 to 35, most significantly in the UK capital.

In 2018, even before Covid hit, the government estimated that about 4.7 million people were within the private rented sector in England only and approximately 497,000 HMOs in England and Wales. The situation is even more inflated after Covid-19 partially halted wage and employment growth.

The recent demand for HMO’s in Leeds has caused a stir in the local market. The capital of Yorkshire has been one of the front runners of HMO investment due to its large student population. In addition, Leeds has enjoyed an 8.6 per cent capital growth in the past five years and has continuously ranked at the top for affordability.

Local property specialists, Dwell, claim Leeds has become the next “golden opportunity “ for investors.

Jon - The director of Dwell said: “The spikes we’ve seen in HMO investment and mortgage requests were quite incredible. The most sought-after areas for HMOs in Leeds are still Headingley and Horsforth, followed by Hyde Park and Woodhouse.”

The government has realised that there is a chronic shortage of housing properties; hence, they set out to build 345 thousand new homes annually in order address this issue.

The specified target has never been met and is unlikely to be completed. However, local authorities and investors recognise an essential growing need for PRS and HMO housing because councils have lost most of their housing portfolios and now rely on private landlords.