The concept of co-living and HMO properties has taken the interest of many investors across the nation in recent years, as the much higher results that a property can yield from this method of occupation prove to be too tantalising to ignore. The ongoing pandemic however has seen a shift when it comes to co-living and HMO properties, as well as the way they operate. We, therefore, wanted to reflect on what the COVID-19 outbreak has done to the Greater Manchester co-living scene over the past year, and what sort of direction investors should look to in the months and years to come.
Co-living, while still highly niche in the UK and across Europe, has been growing in size and stature in recent years – doing its best to distinguish itself from similar investment trends like Build to Rent and purpose-built student accommodation, which share many similarities with co-living. Meanwhile, HMO properties take the concept of traditional properties and create shared living environments for a small group of occupants, typically and successfully for those of the working professional nature.
During the initial outbreak of the pandemic. many co-living and HMO occupants across Greater Manchester who originated from abroad, packed up, handed in notices, and hurried back to their home countries (and who can blame them?).
With the number of occupants upping and leaving, the number of empty rooms splurging their way back onto the property portals has dramatically increased. For landlords with properties in already over-saturated areas, this has become more a problem than it ever has been which in turn, has led to increased void periods, or reduced rents as incentives to fill rooms.
However, the shortfall in new home building, as well as affordable housing, means that HMOs are catering to the demand for offering affordable, flexible living.
In addition, when it comes to living, this pandemic has perhaps shown us more so than ever that as human beings, we can live without materialistic items and ways of living. If anything, COVID-19 has highlighted our reliance on each other; be it friends, family, colleagues or indeed, our local communities.
In many ways, HMO and co-living properties are driving components in creating and sustaining communities, regardless of size. The pandemic has seen the need for raw, essential support and communication rise over the need for a pint at the local (although the notion of popping out for a drink is certainly a cherished memory rather than a taken for granted spur of the moment possibility now).
During the first and second lockdown, people spent months in isolation, living alone or within their limited support bubble. We believe people appreciate the social aspect of renting in co-living and HMO properties. In fact, research carried out by PropertyWire alludes to the socialising element and meeting new people as one of the key reasons to why young working professionals prefer HMO properties over their own, one-bedroom flat. These include:
1) To meet new people, particularly if they are moving to a city where they don’t know anyone. House shares are a great way to make friends and have a ready-made social life.
2) For affordability. Often people are saving to buy their own home and love the affordability of HMOs because they can save more each month than they would if they rented on their own.
3) For convenience. Everything is set up and there is fast service if anything goes wrong.
4) For flexibility. We live in a much more mobile society than ever before. Many people move around the country for work, whether it’s to find a better job, or within their existing position. So being tied to a place isn’t very appealing. HMOs make it easy for them to commit for short periods, with the potential to seamlessly extend based on their requirements.
HMOs may not seem like a viable option in the present, but as the number of vaccines begin to roll out and society attempts to chart its way back to relatively normal waters, the demand for HMO properties and the ways of co-living is only going to rise once again. Investors need to be ready, and ensure they have HMOs in the right areas where they can confidently beat competition in order to minimise void periods and for the right prices. Ensuring HMOs are presented correctly to the typical target audience of young working professionals, offering all the methods of affordable, hassle-free co-living are in place, is guaranteed to give you the advantage over other competing investors.
For more information on how to prepare your HMO pathway or properties for once the pandemic has sailed, give Abode a call on 0161 883 2525.