HMO Investments: Are they worth it?

Houses in multiple occupations (HMOs) are a popular investment choice for landlords.

HMOs can offer a steady income from month to month. Properties don’t often stand vacant because individual tenants and households have their own contracts, and they are unlikely to all move out together. They also reduce the risk of rental arrears because it is unlikely that all tenants would ordinarily fall behind on payments at the same time.

Whether a landlord is letting to students or multiple people, HMOs also tend to offer a higher yield when compared to other property types. Recent analysis from a UK lender has shown that HMO investment properties offer average yields of approximately 7.5%, compared with an average yield of 5.4%.

There are two key things to consider before investing in an HMO. Firstly, if purchasing with a mortgage, you are likely to require a specialist lender. Secondly, not every location is suited to an HMO investment – it is important to establish local demand as well as local competition.

Most importantly, are the regulations surrounding HMOs occupied either by five or more people or by two or more households. Investors require a mandatory licence, the cost of which varies between councils and usually ranges from £500 to £1,000 per property.

If you are thinking of investing in a HMO, get in touch and talk to our team of experts.


What is happening in the UK property market? 

After two years of high market activity, you’d be forgiven for thinking the tide is ready to turn. But despite burgeoning constraints on household finances, the buying frenzy continues, with properties still selling at almost record speeds nationwide.

But what’s driving this situation? The leading cause appears to be a general lack of supply. From delays brought about by the pandemic to a shortage of new homes across the UK, the supply-demand ratio is proving difficult to balance.

Low interest rates and rising inflation also mean that buyers hope to reduce their potential mortgage debt. This combination of factors has contributed to UK house prices increasing by 9.8% between March 2021 and 2022 – adding £24,000 to the average value.

The market is still strong as we move into the summer months – and will most likely remain so for the foreseeable future.

Do you know how much your home is worth right now? If you’re thinking of selling, book a valuation with us today


**UK House Price Index

In the UK, the government has put several schemes for first-time buyers in place to help people trying to get onto the property ladder. With rising house prices, recessions and not much movement to the national living wage - it is the hardest it’s ever been to get there. That is why it is so important to know what options are available to you for receiving a little extra help towards that dream. 

While we know how difficult it is and are aware of the common struggles young people are facing nowadays, it doesn’t mean the desired result is impossible to achieve. As we said - we are lucky in the fact that there are many ways you can receive financial assistance, advice and help to hit those all-important saving goals. 

With that in mind, let’s take a look at what’s on offer at the moment and which options may be best for you. 

What Qualifies You For Schemes For First-Time Buyers?

It is simple really. To be qualified as this term, you and anyone you’re buying the property with must be purchasing your very first residential property. If you’ve owned (not rented) a house or flat before, you’re unlikely to be eligible for much of what we’re about to discuss. 

Because of this, it is always worth consulting your bank or advisor before looking into major financial decisions. 

Help To Buy Equity Loan

This is a loan from the government that you can combine with a small deposit and a mortgage to help you buy a new-build property. You can usually receive between 15% and 40% of the property price, depending on where you live in England. The only catch is that you will need at least a 5% deposit to top it up and be able to get a mortgage agreed to cover the rest. 


There are two main benefits to this approach. 

Firstly, you only need a deposit of 5%, rather than the normal 10% or 15%. This means you don’t need to save as much or use as much of your money that’s been put aside to cover the initial sale. 

Secondly, you will have more access to better mortgage rates as you will only need to cover a small percentage of the property’s value. For example - if you enter with a 5% deposit and a 20% help to buy equity loan, you will only need a mortgage to cover the remaining 75%. As a result, you could be looking at lower monthly payments, to begin with and better mortgage rates overall.


These kinds of schemes for first-time buyers are based on property value. This means you have to be cautious of the ever-changing property market. So even though you are taking a 20% loan - you could end up paying more than you received due to the increased house prices. 

For example, if you bought a £200k property but sell your home with Beals a few years later for £250k, a 20% loan will have increased from £40k to £50k in light of the increased property value. As a result, you will need to pay back £10k more than you borrowed to purchase the house. 

Help To Buy ISA

NOTE - This scheme was closed for new accounts in 2019, so the information below only applies to those who opened a help to buy ISA before 30th November 2019.

Any contribution you make to your help to buy ISA will receive a 25% contribution from the government up to £12,000. This means you could be entitled to an extra £3000 towards your house deposit if you save the full amount. 

If you managed to start saving in a help to buy ISA, you now have until 2029 to add funds and then a further 12 months to claim your government bonus. All of your savings are tax-free.


The clear advantage of this is receiving extra tax-free money from the government! They are essentially topping up your house deposit as a reward for saving money. Also, both your initial deposit and monthly contributions qualify for the 25% bonus so you won’t be missing out on any pennies.

Another benefit is true if you are buying with someone else. Since you can both qualify for these ISAs, it means you would be eligible for £6000 extra from the government to help with that deposit!


Although you are entitled to an initial deposit of up to £1000, you can then only contribute £200 a month to your ISA. This can prolong the saving process for some people and means you are limited to what you can put away. 

Also, the government bonus only gets paid out when you are buying your first home. This means you cannot use it for any other purchases, even in an emergency. It has one specific purpose and then of course could not be used again to buy a second property. 

Another disadvantage is the cap on property prices. For example, if you live outside of London, you must be intending to buy a property worth LESS than £250k. However, due to the hefty difference in the property market, this increased to less than £450k inside of London. 

Shared Ownership

If you can’t quite afford the mortgage on 100% of a property, shared ownership offers you the chance to buy a share of between 10% and 75% of the home and pay rent on the rest. (It doesn’t mean you need to share the house with other people.)

If you do not own another property and your total household income is less than £80k a year you will be eligible to buy this way. It is essentially a middle ground between owning and renting that allows you to buy more shares in the property as and when you can afford it.



You’ll only be paying a mortgage on the percentage of shares you own. This means the money needed for a deposit will be a lot less. As a result, it is much easier for lower-income families to get onto the property ladder.

Furthermore, this method is more preferable to renting as the shares you own will increase in value if the price of the property goes up. This means you will have a nice bit of equity to lean on when you decide to take the next step to full ownership. 


First and foremost, you are still a tenant. This means you may need to ask the housing association for permission to make changes or improvements to the property. Similarly, you may need to pay fees for maintenance to communal areas if there are any. 

Also, if you later want to move on and sell your home, you could run into some trouble making a quick sale. This is because you could be limited to who can buy the home and other restrictions may make it difficult to get rid of. 

Lifetime ISA

Also known as LISAs, this falls under the same branch of schemes for first-time buyers as the help to buy ISA. 

Similarly, the government will still pay a 25% bonus on anything you contribute up to a set limit each year. However, with a LISA you are entitled to add up to £4000 a year rather than the £200 a month cap on help to buy. This means that the most you can claim from the government in 12 months is £1000.

The major difference between the two is that you can use a lifetime ISA for more than purchasing a property. You are also allowed to withdraw funds for retirement once you reach 60. This means you can continue paying into the account AFTER you have bought your first home - it will just have to remain there until you’re 60 years old!


Firstly, it is, of course, worth mentioning that while they are similar, the lifetime ISA is still available to you. You can no longer apply for a help to buy ISA.

Obviously, gaining an extra £1000 a year to help towards a deposit is a huge benefit of this scheme. But beyond that, you can’t forget that not only are the contributions you make tax free. So is any interest and government bonus you earn on it. 

As well as this, the larger cap means your saving goals could be hit much quicker and you will be well on your way to getting on that property ladder in a couple of years. Also, unlike with a help to buy ISA, you are not limited to one purchase. You can keep adding to it to top up your pension pot and receive a nice profit on top!


One potential drawback is that your £4000 a year allowance on LISAs also contributes to your cap on other ISAs. This means that should you save the full amount, you will only be able to invest up to £16k in other places. 

Also, should you need to withdraw any funds for reasons other than purchasing a property, becoming terminally ill or retiring at 60, you will incur a 25% exit penalty fee. Even transferring your LISA to a different account would see you getting less than you put in. 

Get On The Property Ladder With Beals

We are lucky to have so many schemes available to us in the UK to help young people get on the property ladder. It can be really useful for low-income families and solo-buyers. However, there are always things to consider when looking to open new accounts and so your financial status, personal situation and future plans should all be considered before making a decision.

Also, don’t forget that many of these can only be used to purchase your first home. If you are already a homeowner, you will not be entitled and you cannot use the scheme again after becoming one. So take your time to research thoroughly and think about which looks right for you. 

But for any more advice or help starting the journey to your dream home, give us a call! We offer an unparalleled experience which is why we have so many repeat customers, we know how to get it right every time. Whether you be a buyer, seller, landlord or tenant, we've got you covered. Contact us here by submitting an enquiry form or call one of our dedicated branches, the individual contact numbers for each can be found here.


Before we get into the nitty-gritty about ARLA Propertymark, first, we should fill in some blanks about the property industry and the lack of compulsory regulation.

You might be surprised to learn that regulation in the property world is entirely voluntary. There is no compulsory industry-recognised standard that all letting and sales agents adhere to. In almost every other industry, laws impose strict controls to protect consumers. 

Can you imagine the financial services industry operating without checks and balances? Or farming, or manufacturing? The public comes to expect the highest standards because of regulation. 

This is not the case with the property industry. Anyone can set up a sales or lettings agent and handle large sums of their customer’s money, with little or no recourse should something go wrong. Untrained, unchecked, untrustworthy agents can still operate within the system. 

Imagine a world where you could lose thousands of pounds with precious little room for action? That’s why ARLA Propertymark agents are rightly proud of their professional status. 

What Is ARLA Propertymark?

ARLA Propertymark is the leading membership body for property professionals. It pulls all the separate associations under one umbrella. With almost 50 years of dedicated service upholding the highest standards, these schemes have been at the forefront of consumer protection. 


So, who are they? 


Who Are ARLA Propertymark?

ARLA Propertymark consists of a board made up of industry leaders from a variety of different backgrounds. They work closely with property professionals to set industry-leading standards via accreditation, recognised qualifications and training programmes. 


They have a strategic vision across four pillars:



What Does ARLA Propertymark Do?

They offer guidance and advice to members on all things property-related, ensure adherence to their strict code of conduct, and enforce any compliance breaches through disciplinary action. 

They hold their members to a higher standard than current laws demand, giving you peace of mind that you are dealing with property experts who value the highest standards of conduct. In short, it is a mark of professional pride that no matter what, you are always protected. 

And why?

Because the entire scheme is voluntary, it works by garnering the collective responsibility of like-minded industry professionals to deliver service above and beyond the minimum stipulations of the law. 

Beal’s Letting Agents wholeheartedly support this drive to improve standards, increase accountability, and make the lettings industry more transparent. 

By opting in, property professionals openly agree to the scrutiny that comes with bearing the badge of such a prestigious and stringent scheme. 

It means that ARLA Propertymark, through its members, strives to increase protections for consumers through its comprehensive training programmes by promoting education and awareness within the industry.


Why Should This Matter to You?

Your property is one of the most precious things you own. Looking for the ARLA Propertymark guarantees that you have placed your asset in the care of the most trustworthy lettings agents in the industry. It removes the elements of uncertainty and fear. 

Trust is an important thing when entering a tenancy or renting a property. The ARLA Propertymark logo reinforces that you are dealing with a professional who prides themselves on delivering the latest guidance and advice. 


What Can You Expect from an ARLA Propertymark Agent?

ARLA Propertymark holds its members accountable to a strict code of practice, leaving them open to scrutiny should the need arise. It empowers you, the consumer because you are covered by the highest levels of protection and security. 


Here’s an at-a-glance list of benefits:



What You Can Expect From Us

As an ARLA Propertymark member, Beal’s adhere to a strict code of conduct. It means that all client funds are held in separate bonded client accounts, which are audited annually by the independent Propertymark Client Money Protection Scheme.

Your money is safe, and nothing is more important than that. Only property professionals with a sense of fair play and transparent business practices would sign up voluntarily to such a high degree of accountability. 


What If an Agent Isn’t a Member of ARLA Propertymark?

Firstly, all accredited members use the ARLA Propertymark logo on literature and window displays to advertise their trustworthiness. So, if you don’t see the logo displayed anywhere or the agent fails to mention ARLA Propertymark, it should be a red flag. 

Secondly, ask yourself why they wouldn’t want to hold themselves to the very highest standards? Why wouldn’t they want to be audited annually to protect the money in their client accounts? What is it they have to hide?

Thirdly, ask them directly if they are accredited with the ARLA Propertymark Scheme. If they are not members, walk away because you cannot gamble with your most precious asset. They are essentially saying they are not professional enough to withstand independent scrutiny. 

Always check before instructing your agent that they are ARLA Propertymark accredited. After all, you wouldn’t book a holiday if it wasn’t ATOL or APTA protected!


To Recap

ARLA Propertymark is a badge of quality. Displaying the logo tells you as a customer that you are dealing with a respected and transparent letting agent who volunteers to be scrutinised at a level way above the minimum standards of law. 

You have a system of recourse, through the consumer complaints procedure, in the unlikely event that you should need it, and most importantly, your asset is in safe hands. 

For more information, please get in touch with Beal’s for a no-obligation chat. It could be the smartest move you make. 


What is Client Money Protection?

When letting through Beals, you can rest assured that your money is in safe hands because we are a member of ARLA propertymark. This means that our landlords’ and tenants’ money is protected through Client Money Protection (CMP).

The Client Money Protection (CMP) Scheme provides compensation for landlords and tenants when agents misappropriate or misuse their security deposit, rent or any other client funds.

Should this occur and a landlord is using a letting agent that is registered with ARLA propertymark, the landlord can make a claim and propertymark will arrange a reimbursement*.

Each year, unprotected landlords and tenants lose money when their funds are misappropriated.

View Our Certificate

Need not worry

We are a proud member of ARLA propertymark, and that means that not only is your money protected but we also come with some additional benefits**:

  • Experienced and trained property experts who are required to attend regular training
  • Our property experts are up to date with the latest registration changes and best practice for lettings
  • Our property experts and office adhere to the nationally recognised TPO Code of Practice

To find out more about what it means to be an ARLA propertymark estate agent, visit the propertymark website or see their accounting rules.

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