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HMO Sell Off in Plymouth

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It used to be pretty rare to see HMOs for sale but recently they've been appearing increasingly on Rightmove.

Most notably in Plymouth, where if you do a search for 5+ bedroom properties in price order you'll find a good number of HMOs for sale under £200,000.

Some of these look pretty good value too (by current prices at least!) particularly the one below:

http://www.rightmove.co.uk/property-for-sale/property-63171245.html

But they're not selling. Most of these same properties have been on Rightmove since I first noticed them in September.

Could possibly be one landlord selling his 'portfolio' although they're with a lot of different agents.

I don't know much about the current situation in Plymouth so perhaps there's a reason why less rented rooms are required (military/ students reducing perhaps?) but equally it might be a local realisation of S24 implications.

Smith

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I have a hypothesis, that there is a pull of London centric, South Eastern, Cam/oxbridge universities. Hinterland Universities, such as Plymouth numbers might be dropping as a result. Anyone got any data?

University buildings and student accommodation blocks have been growing like wildfire in Southampton and Portsmouth (The Old Zurich Insurance building is now all student digs).

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Assuming XswampyX is right, it doesn't look too disastrous from the outside (although might smell of Chinese food a bit!).

Seems unlikely anyone would go to the trouble of converting to an HMO, subdividing bedrooms and (presumably) the legal hurdles too, only to immediately put it on the market for not much more than it's worth as a family home. More likely they've had a significant change of plan.

If this was a one-off then you could perhaps explain it away with change in family circumstances etc. but there's quite a few of them for sale in Plymouth:

http://www.rightmove.co.uk/property-for-sale/property-43506756.html

http://www.rightmove.co.uk/property-for-sale/property-46052836.html 

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I expect the properties you are seeing are most likely student properties.

Soon most student accomodation will be in purpose built flats commissioned by the University

This 22 storey block is just nearing completion. Many other tower blocks have been completed in the last 5 years.

Private landlords letting to students have seen their market vapourise.

It will be interesting to see what happens. I expect prices will tumble as there is no market without conversion back to a home and, as the whole area became student accommodation, it is unlikely that there will be much appeal for an individual to buy and convert an individual property among what remains a road of HMOs.

 

Edited by LiveinHope

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Quote

Public info
Property type: Terraced house | Tenure: Freehold | Last sale: £134,950 | Sale date: 19th Nov 2004 - Previous sales | Currently for sale

This 8 bed freehold terraced house is located at 17 Lipson Vale, Plymouth PL4 7HF and has an estimated current value of £174,000. Lipson Vale has 19 houses and flats on it with a average current value of £164,294, compared to an average property value of £166,378 for PL4. There have been 4 property sales on Lipson Vale, PL4 over the last 5 years with an average house price paid of £139,375 and this terraced house was last sold on 19th Nov 2004 for £134,950. There are currently 249 properties for sale in PL4 with an average asking price of £177,553 and 507 properties to rent in PL4 with an average asking rent of £346 pw.

This ^ might explain it.

http://www.zoopla.co.uk/property/17-lipson-vale/plymouth/pl4-7hf/18432271

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I'm looking to buy in Plymouth. a lot of custom student accommodation is springing up.

also house shares get his hardest as all the big employers have laid off over the last two years. Rittal, princess, Kawasaki, BD, Bardens. 

properties in Plymouth went from 130k in 2013 to a peak for the same property of 185k in 2015.

All due to BTL binge, which is very very popular in Plymouth. 

I think it's clear that without BTL buyers the market in Plymouth will fall to 2013 levels, the market is doomed. I think everyone can see the writing is on the wall. the local wages can't support the current prices. 

 

 

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1 hour ago, jiltedjen said:

I'm looking to buy in Plymouth. a lot of custom student accommodation is springing up.

also house shares get his hardest as all the big employers have laid off over the last two years. Rittal, princess, Kawasaki, BD, Bardens. 

properties in Plymouth went from 130k in 2013 to a peak for the same property of 185k in 2015.

All due to BTL binge, which is very very popular in Plymouth. 

I think it's clear that without BTL buyers the market in Plymouth will fall to 2013 levels, the market is doomed. I think everyone can see the writing is on the wall. the local wages can't support the current prices. 

Plymouth singled out when the "National HMO Lobby" provided written evidence to the Communities and Local Government Select committee PRS enquiry (2013) on the process of "studentification".

Quote

Student populations have increased in the most dramatic ways in many of the smaller English university towns and cities since 2001. Figure 2 demonstrates how the total full-time undergraduate student populations increased in between 2000–01 and 2006–07, in a number of case studies. … Strikingly, increases were most marked in Bournemouth (+47.1%), Norwich (+36.8%), Bath (+30.0%), Plymouth (+29.2%), Canterbury
(+25.3%), York (+23.9%), Reading (+22.6%), Durham (+21.4%), Loughborough (+16.1%), Brighton and Hove
(+12.7%) and Southampton (+8.2%).

Source

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2 hours ago, Smith said:

It used to be pretty rare to see HMOs for sale but recently they've been appearing increasingly on Rightmove.

http://www.rightmove.co.uk/property-for-sale/property-63171245.html

Just look at the floorplan!

The description claims "8 double lettings rooms", but several of them are below the floor area for a double room required by the national minimum room size standard on overcrowding (110 sq ft)

https://www.rla.org.uk/landlord/guides/room-sizes-for-houses-in-multiple-occupation.shtml

Look at photo 3!  Where is a student supposed to store their clothes and books?

The "living room" area is a basement room without any windows, the only natural light coming from the adjacent kitchen. 

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1 hour ago, Bland Unsight said:

Plymouth singled out when the "National HMO Lobby" provided written evidence to the Communities and Local Government Select committee PRS enquiry (2013) on the process of "studentification".

Source

Imagine the uproar the same comments were made about blacks or muslims. Can't have student's living on my street.

Its OK to discrimiminate against students, but not about any other groups. Why's that then?

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next to a Chinese takeaway...no thanks. I lived over the road from one and it absolutely stank...(expect I will be called racist now.)

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I lived in Plymouth a decade ago for a couple of years on Mutley Plains, the locals (Janners) really hated the students as they made a load of noise and the students hated the locals as they were often accosted by them on nights out.

Coming from London I was amazed that back then you could get a five bed house for £65k, dunno how much they cost today.

The whole of Plymouth isn't that great really, go up union street when the Navies for various different countries docked at the same time and it was like a warzone with paramilitary police breaking up fights with truncheons. 

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5 hours ago, LiveinHope said:

This 22 storey block is just nearing completion. Many other tower blocks have been completed in the last 5 years.

Private landlords letting to students have seen their market vapourise.

I wonder if this is something to do with universities trying to survive, wouldn't be surprised. With LLs sucking up money in rent students have less for Uni wich might be putting applicants off. It's either Uni and LLs going down or just LLs going down if Unis  provide affordable accommodation for students.

Looking forward to these rent seeking parasitic scum getting off the backs of the UK's future tax paying workforce.

 

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29 minutes ago, Arpeggio said:

I wonder if this is something to do with universities trying to survive, wouldn't be surprised. With LLs sucking up money in rent students have less for Uni wich might be putting applicants off. It's either Uni and LLs going down or just LLs going down if Unis  provide affordable accommodation for students.

Looking forward to these rent seeking parasitic scum getting off the backs of the UK's future tax paying workforce.

 

Plymouth University had been in a dire financial state when of some these student accommodation builds were planned.

Page 27 of the 2013-14 financial statement makes astonishing reading.

Financial problems aside, it makes sense for any University to find a way to retain student's money. But it will only help if it is spent wisely on student education and facilities, rather than the VC's and other managerial salaries.

I do eagerly anticipate the knock on effect on  private landlords, however.

Edited by LiveinHope

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50 minutes ago, LiveinHope said:

Plymouth University had been in a dire financial state when of some these student accommodation builds were planned.

Page 27 of the 2013-14 financial statement makes astonishing reading.

Financial problems aside, it makes sense for any University to find a way to retain student's money. But it will only help if it is spent wisely on student education and facilities, rather than the VC's and other managerial salaries.

I do eagerly anticipate the knock on effect on  private landlords, however.

Yes, and they won't be at the whims of a market out of their control. Wouldn't be good for the Uni to have invested lots in education and facilities for the property market to change and start selling up leaving nowhere for their students! 

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Aaa...the HMO. 

Mentioned on a previous thread that 30 years ago, before the invention of the 118'er and the advent of dinner parties where property and range rovers are discussed,  lived a breed of tight fisted misers called the LL. 

Cash rich and 'risby like' they used to crawl in the underworld counting the pennies and treating tenants badly and treating themselves even worse. But they knew what they were, owed nothing, weren't entitled....just horribly mean and usually unhappy.  

These creatures bought HMOs for 50% of the value of neighbouring properties (or less)....because who on earth could you sell a HMO too? Also no lenders touched HMOs only commercial lenders and that was a very different ball game.  I saw 2 terraces split into 8 flats once change hands for £30k for the pair, yet those flats were 'worth' that each....the joys of buying from an estate after the demise of a LL. 

Then came the 118'er. Buying yields and believing HPI forever. They liked the HMO because it provided a monthly profit without working....but the 118 doesn't use its own money, it borrowers the money. Even better, no need to work and no need to have earned the money in the first place. 

Whilst still mean like the old LLs these guys were daft with money too, no respect for debt. Not a business and not really investors....just chasing something they didn't understand and they began to pay almost as much for the HMO as a normal house. Infact in some areas they paid a premium. Those 2 terraces bought for £30k would now trade at £400k each...and a 118'er would snap them up due to a 5% yield. 

Many of the old LLs could have sold....but the old LL does sell, ever. They hold one or two and they hold them until they are buried. 

S24, student builds etc will hit these properties the hardest. One worry for these 118'ers is that when prices begin to go, that they may have rely on the old LL as buyers for the HMO. If that is the case....they are in real trouble.

I don't know Plymouth but some of the places in Leeds 25 years ago were 'at the cheap end' student areas. They are now deemed 'expensive and fashionable'.....with some HMOs traded at crazy prices. 

In my own town I see HMOs being advertised at huge premium prices. I see houses being bought at full market price and then converted for daft amounts eg £100k into 'holiday lets' (there is a strong demand). But I see a day when these come to be sold they are traded at 'commercial prices' again....to a restricted market  and well under today's numbers.

It will be an interesting watch in 2017. An an even more interesting one after that. I am watching the HMOs near me to see the start of the end (or of course the start of the beginning?). 

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1 hour ago, Phil321 said:

Aaa...the HMO. 

Mentioned on a previous thread that 30 years ago, before the invention of the 118'er and the advent of dinner parties where property and range rovers are discussed,  lived a breed of tight fisted misers called the LL. 

Cash rich and 'risby like' they used to crawl in the underworld counting the pennies and treating tenants badly and treating themselves even worse. But they knew what they were, owed nothing, weren't entitled....just horribly mean and usually unhappy.  

These creatures bought HMOs for 50% of the value of neighbouring properties (or less)....because who on earth could you sell a HMO too? Also no lenders touched HMOs only commercial lenders and that was a very different ball game.  I saw 2 terraces split into 8 flats once change hands for £30k for the pair, yet those flats were 'worth' that each....the joys of buying from an estate after the demise of a LL. 

Then came the 118'er. Buying yields and believing HPI forever. They liked the HMO because it provided a monthly profit without working....but the 118 doesn't use its own money, it borrowers the money. Even better, no need to work and no need to have earned the money in the first place. 

Whilst still mean like the old LLs these guys were daft with money too, no respect for debt. Not a business and not really investors....just chasing something they didn't understand and they began to pay almost as much for the HMO as a normal house. Infact in some areas they paid a premium. Those 2 terraces bought for £30k would now trade at £400k each...and a 118'er would snap them up due to a 5% yield. 

Many of the old LLs could have sold....but the old LL does sell, ever. They hold one or two and they hold them until they are buried. 

S24, student builds etc will hit these properties the hardest. One worry for these 118'ers is that when prices begin to go, that they may have rely on the old LL as buyers for the HMO. If that is the case....they are in real trouble.

I don't know Plymouth but some of the places in Leeds 25 years ago were 'at the cheap end' student areas. They are now deemed 'expensive and fashionable'.....with some HMOs traded at crazy prices. 

In my own town I see HMOs being advertised at huge premium prices. I see houses being bought at full market price and then converted for daft amounts eg £100k into 'holiday lets' (there is a strong demand). But I see a day when these come to be sold they are traded at 'commercial prices' again....to a restricted market  and well under today's numbers.

It will be an interesting watch in 2017. An an even more interesting one after that. I am watching the HMOs near me to see the start of the end (or of course the start of the beginning?). 

Very good description of traditional LLs vs 118'ers, one who buys cheap to hold and understands yield, and one who only buys to sell and doesn't understand that prices can go down as well as up.

Savvy LLs in the student market should have started selling up in Plymouth 3 to 4 years ago as the writing appeared on the wall.

Students have also changed too. A greater proportion of students are far less independent than in the cohort 30 years ago, and so they will probably stay happily in 'halls' for all three years given the opportunity. (I think this is another effect of encouraging students who wouldn't normally have considered university to follow a university education). So, a local private rental market that expanded for the increased student numbers is having the ground cut from under its feet. Lovely jubbly.

Edited by LiveinHope

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16 hours ago, LiveinHope said:

Plymouth University had been in a dire financial state when of some these student accommodation builds were planned.

Page 27 of the 2013-14 financial statement makes astonishing reading.

Financial problems aside, it makes sense for any University to find a way to retain student's money. But it will only help if it is spent wisely on student education and facilities, rather than the VC's and other managerial salaries.

I do eagerly anticipate the knock on effect on  private landlords, however.

I note that overseas student income was becoming increasingly important to Plymouth Uni according to that report. That class of student tends to gravitate towards purpose built student housing not HMO. In addition unless things have changed most students rely on university accommodation departments to find a place to live.  Given that situation one would expect them to be directing students at their purpose built property not private HMO LL. 

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21 minutes ago, stormymonday_2011 said:

I note that overseas student income was becoming increasingly important to Plymouth Uni according to that report. That class of student tends to gravitate towards purpose built student housing not HMO. In addition unless things have changed most students rely on university accommodation departments to find a place to live.  Given that situation one would expect them to be directing students at their purpose built property not private HMO LL. 

Yes, there has been a big recruitment drive for foreign students and both foreign students and an increasing number of UK students prefer 'Halls'. It will be interesting to see what happens to the HMOs. I can't see the LLs wanting the expense of converting them back into family homes so they will probably be undesirable unless very, very cheap. And as new homes are being thrown up two a penny, although currently advertised at market prices, I think there will soon be a property glut in Plymouth. The city is a dire place to live, however.

 

 

Edited by LiveinHope

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