Keeping an eye on changing demographics is one way that landlords and property investors can benefit from these changes.
One such change, which can be identified by close analysis of the national statistics, is the rise in the number of people living alone.
A handy, practical and affordable solution for lone dwellers is living in a shared rented house, and in rental terms that means an HMO – a house in multiple occupation.
The traditional bed-sit image of a grotty room in a large old Victorian run-down house is becoming a thing of the past. As standards improve and city living for working and professional groups, as well as the retired, means that landlords are providing rather more up-market abodes in this type of accommodation – and the demand is there.
Consequently, buy to let investors are looking at the possibility of a HMO investments to take advantage of this growing trend, and to make a better return on investment in the process – multi-occupied properties can produce income yields far above those of single lets.
Data recently release by the Office for National Statistics shows that one person households have increased by 16 per cent to 7.7 million over the 20-year period to 2017. This trend, The ONS is anticipating, will continue and that this figure will reach 10.7 million by 2039.
ONS put the trend down largely to older age groups in single living, those selling properties to release capital for living in retirement, plus a bulge in the number of births in the 1960s, all added to with more couples splitting in older age.
The old saying “two can live as cheaply as one” has a ring of truth about it, so when one person lives alone, whether owning or renting, in a traditional property, with the costs all falling on one income or pension, they are high in proportion.
A single room in a larger property therefore makes a lot of sense to the renter, with the added bonus that there are no scary maintenance bills to pay.
So, buy to let landlords who can offer good quality shared accommodation (HMOs) can benefit from this growing trend of downsizing and saving on housing costs, both young and old are considering shared accommodation as a viable option and an optimal solution for their needs.
Co-founder of ideal flatmate, Tom Gatzen, has said:
“The current cost of living is making it tough for many to get by, but shouldering this financial burden alone makes it all the more difficult.
“While we are currently seeing an upward trend in single occupant living as a result of a growing population and social factors such as an increase in divorce rates, we are also seeing a similar increase across other living habits such as co-living.
“While living alone is more prevalent across older age groups, we’re seeing a growing preference amongst younger generations to live in share households. This is not only helping them to address the financial issues head on but can also help with other disadvantages associated with living alone such as a lower level of wellbeing.
“If properly considered and developed, this lifestyle trend could go some way in addressing the predicted uplift in those living alone over the next two decades and the negative impact that this could have on this segment of the population.”©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law, always seek professional advice.