Multiple Occupation / HMO Valuations

HMO's remain a popular investment for landlords. HMO's have traditionally been considered a commercial valuation on a residential property, however, HMO's have become a specific asset class. Valuing HMO's is a specialised field. The type of valuation ("bricks and mortar" or "commercial") will depend on the purpose of the valuation, the type of HMO and whether it is in an Article 4 area.

Bricks & Mortar Valuations are the most common type of HMO Valuations. They are commonplace if the property is a normal single (C3) dwelling and is based on the current market value and local comparables.

Commercial (Investment or Yield) Valuations take into consideration the achievable rental income and yield of the HMO. It also considers the location and potential to sustain regular letting of individual rooms. It also takes into account repairs and management costs.

Types of HMO’s include: Multi-let basis / small HMO. Any works to convert are minimal. When empty the property can be used as a single let. No Article 4 in the area and no planning in place. The building has had a significant change to be used as an HMO and cannot be used as a single let. Article 4 is in place (Up to 6 beds). There is a barrier to new HMO's. Planning in place (Sui Generis ). 7 beds or more. To be used as a large HMO.