Earlier this month we wrote a blog post titled “Cardiff Student Housing or Professional House Share?” which discussed the fall in student numbers for the current academic year and the number of empty HMO and Multi Let properties available for rent and for sale across the Cathays, Gabalfa and Heath areas of Cardiff and whether landlords should be diversifying and looking at the professional house share market.
Well today I am writing about the current valuation of HMO and Multi Let properties in Cardiff after being contacted by a Cardiff estate agent with an all too familiar story.
Here is the situation the landlord has always provided Cardiff Student Housing in Cathays and Heath areas of Cardiff and I am sure they have done very well over the years but now the Cardiff student housing market is changing as large corporates are providing housing, such as Student Castle, student numbers have dropped and the student accommodation is not filled.
What Are The Landlords Options?
Well there are four main options:
- The landlord can rent the whole house to a family
- The landlord can look to continue down the multi let route and provide a professional house share
- Contact a specialist HMO Rent Guarantee provider
- Sell the property
Sounds straight forward, but many of the properties for sale and to let geared towards the Cardiff Student Housing market need a large amount of investment to bring them to a standard required for options 1,2 and 3, so the only option is to sell!
Option 4: For Sale
This sounds a logical option for the landlord who may not wish to spend £20-30k on their property so a “For Sale” board is put in the front of the house. A few viewings later and an offer is accepted the landlord has the price he wants, but it’s not that simple.
These HMO and Multi Let properties which are geared for the Cardiff Student Housing market are often set up with locks on doors so straight away you can no longer arrange a standard BTL mortgage the buyer will have to look at a specialist HMO mortgage or commercial finance which is considerably more expensive to arrange than you high street BTL.
Secondly even if locks aren’t on internal doors and there is no whiff that the property is set out as a HMO or Multi Let the rental income versus interest only mortgage payments will no stack up unless a hefty deposit is put down which is also required for HMO and commercial finance as often the property is overvalued in today’s market.
So that’s why I am hearing the same story over and over from Cardiff estate agents, the vendor agreed a sale price but the deal has fallen through as the purchaser cannot raise the required finance.
So as we pass Fresher’s Week and all students are settled for the 2012-13 academic year how many HMO and multi lets will be left untenanted and let standing for sale? Quite a few as many need £10-30K being spent on them.
What’s The Outlook?
If you are looking to sell your Cardiff student housing and it requires substantial work you are probably going to have to be prepared to lower your expectations when looking for a sale as often a deposit of £50K is needed and hefty fees are incurred when raising HMO or commercial finance.
Rooms in Cardiff is the place to go for those looking to house share in Cardiff and further afield in South Wales. Whether you are looking for Cardiff student housing or a professional house share, Rooms in Cardiff is your number one resource for private landlord lettings, house of multiple occupation (HMO), multi let property and to find your next housemate.
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