All Posts by Matthew Moody

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About the Author

Matthew founded Your HMO Expert in 2006 and since then have provided the authoritative place on the web to come to find out how HMO Property Investment works and how you can get started.

Nov 17

LIBOR Rates Drop but the Lenders Still Make Hay From Property Investing

By Matthew Moody | Property Investing

Interesting times we all live in.  Property investing is still alive but you’d be surprised at the rates out there.

I checked the LIBOR yesterday and as of November 14th, the £ Libor was at 3.00000% with reduction of -0.213 in the last week. 

I’m getting letters every other day now from lenders reducing my interest rates on my tracker mortgages (I almost wishes I had gone for more of them to be honest!) but whats happening in the current buy-to-let market?

Well, some new rates were issued last week by Birmingham Midshires and their lead-in rate at 75% loan-to-value is a staggering 5.89% fixed or 6.19% tracker.  So, at current LIBOR even future-forecasting where it may end up, they are making a nice 2.89% to 3.19% on their lending.

But that’s not all; you also have to pay an arrangement fee of 2.5% for the priviledge.  And if you did go for the tracker, its a staggering 3.19% above base rate for 36 months – wow.

So much for the days of 4.99% rates from the leading ex-player in the market, Mortgage Express; I think the new buy-to-let rates are going to hover around the 6% mark despite the recent and forecasted future reductions in the Bank of England base rate.

So for property investing to work smart; keep your eyes peeled on the latest developments and if a good product comes out, snap it up or get a DIP done asap to lock in the rate.

Nov 15

Property Investing Bargains

By Matthew Moody | Property Investing

“There are no property bargains out there that meet my criteria” wails one investor. Well yes, actually there are – its just a matter of opening your eyes…

See how I found a positive cashflow property after 5 minutes searching on Right Move.

Nov 14

A HMO Strategy for the Credit Crunch

By Matthew Moody | HMOs

OK, so you’re in the midst of the credit crunch, some of your mortgages have come down, the pressure eased a little bit but you’re still not making enough to either give up that dratted job or support your lifestyle.

So what can you do?

In the good times you could have:

  • remortgage onto a better rate, pulled out some money and still paid less than you were paying
  • sell a house, use your capital gains allowance and bank the difference
  • bought and sold a house in 60-90 days
  • gone and done another cashback deal

Sadly, in todays market, its become slightly more difficult to do this.

So, if I may suggest a HMO strategy that anybody can do – and it will even help you understand whether or not you want to get into HMO’s in a big way.  So what do you need to do?

  1. Face up to the fear of doing a HMO and do it anyway!
  2. If you own a property, then ideally chose one which is at LEAST 3 bedrooms (it just doesn’t work doing it for less rooms than that).  If you don’t own a property, then focus on getting a property with at LEAST 4 bedrooms (or 3 bedrooms if you are still feeling the fear!)
  3. Follow the steps in my FREE ecourse (you can sign up at the top right) and get your first HMO set up.

If you have any questions, then put them under the “Ask Matthew” section and I will answer them as soon as I can.

Nov 12

Does a 2-Bedroom House Need a HMO Licence?

By Matthew Moody | Property Investing

A question recently poised to me by a client and normally I would say – No.

However, a bizarre turn of events led me to reading a Liberal Democrat blog and during the course of a day out with the Chief Executive of Reading Borough Council, they happened upon a 2-bedroom property that had been turned into a 9-bedroom HMO!

Several things sprung to my mind:

  1. I understood that minimum room sizes were generally 6.5 metre squared – surely going from 2 to 9 bedrooms would make them so small they would be broom cupboards!
  2. I know that generally you don’t need to get planning for change of use from a residential property to a House in Multiple Occupation unless its over 7 rooms but how on earth did these guys get planning or did they not apply?
  3. Parking is going to be a massive issue.  I find that only around 50% of tenants have a car but even so – at 9 bedrooms, that possibly 4 to 5 cars and in a terraced road, that’s going to cause major issues.
  4. Normally a 2-bed HMO wouldn’t need a HMO licence but in this case with 9 bedrooms, I would assume that it does as its WAY over the norm.

So for my responsible HMO property investors out there, here are some rules to follow when contemplating your next HMO:

  1. Ensure your minimum room sizes are 6.5 metre squared – its just not feasible renting a room smaller than this and would you want to live in a room smaller than this?
  2. Ensure that you find out what the planning guidelines are in the town where you wish to run your HMO – and if you can, stick to smaller HMO’s to avoid having to change usage.
  3. Make sure that you have off-road parking for at least 50% of your tenants as its very rare that more than this will have their own cars.
  4. Speak to your local housing officers about the HMO licence, find out what is required and get your applications in if they are needed.

And to the good people of Redland, hope you get some of your issues sorted out quickly!

Nov 10

Avoiding Property Investing Scams

By Matthew Moody | Property Investing

I read a heart-breaking story today on another blog about how a property investor (who was also a mortgage broker) got taken in by a cowboy property investment firm.

As you know, I also run a small sourcing company with a partner in Manchester and the one thing I echo repeatedly to our clients is – due diligence and research.

An ethical sourcing company is in the business of bringing you deals that they have carried out their own due diligence on and that they are happy that the deals stacks for their investors.  But you need to do your own due diligence too – don’t take the experts words for it – get outside advice.  Be particularly wary of the deal which is completely packaged up unless its from a firm which has a track record, happy customers and can prove the details its giving to you.

If you’re investing in HMO’s, then make sure you follow my golden rules of determining demand, found in my ecourse (sign up at the top right hand side of the page).

If you want to read the full heart-wrenching story of a property investing scam in detail, then read on.

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