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We've just had our mortgage provider turn down our application because "almost all the houses in the area are HMOs let to students" and there is a "very low level of owner occupation". Our broker seems to think that most high street lenders are going to have a similar reluctance to lend on the property, though he's currently looking around for an alternative. Leaving aside the inconvenience and expense of hunting out a mortgage provider who is willing to lend, all this has made me wonder if the property is a wise purchase. Searching online, it seems the local area apparently has close to a 90% student population. The area has also been under an Article 4 Restriction for the last couple of years (meaning that it can't be converted into a student let), which I've been advised has adversely affected property values. It looks like a really nice area where we'd be happy to live, and we love the house itself, but it seems inevitable that all this is going to affect the resaleability of the property. As first time buyers, I'm having a great deal of trouble assessing whether the price we're paying is reasonable, or whether we're effectively handing over our life savings to bail the current owner out of a hole. Can anyone offer us any advice on the situation?
Destroy perfectly good houses and flats, turn them into slave quarters and you too can quit your job! http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10865251/Former-Boots-boss-Buy-to-let-replaced-my-salary-in-four-years.html Her yield of 15% sounds a bit optimistic.