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Many buy to let investors are looking at HMO investment as the number of one person households increases.
Latest data from the Office for National Statistics shows that the number of one person households is continuing to rise, up 16 per cent to 7.7 million over the two decades from 1997 to 2017. This is projected to hit 10.7 million by 2039.
This trend has largely been driven by older age groups and as a result of greater numbers of children born in the 1960s and exacerbated by an increase in singles and divorcees.
The higher cost of living for one person households has also been highlighted, with those doing so spending up to 92 per cent of their income leaving little room to save. The biggest expenditure is housing costs including rent and bills.
Those living alone are also less likely to own their own home and therefore look for rented accommodation.
In addition, living alone also has implications that stretch beyond the financial burden. One person households have the lowest measure of wellbeing of all house hold types.
Whilst rented property can still be expensive for one person households, many are turning towards shared accommodation to help balance the budget and also provide company.
Buy to let investors who can offer quality shared accommodation are likely to reap the benefits the trend towards one person households with higher than average yields.
Co-founder of ideal flatmate, Tom Gatzen, commented: ‘The current cost of living is making it tough for many to get by, but shouldering this financial burden alone makes it all the more difficult.
‘While we are currently seeing an upward trend in single occupant living as a result of a growing population and social factors such as an increase in divorce rates, we are also seeing a similar increase across other living habits such as co-living.
‘While living alone is more prevalent across older age groups, we’re seeing a growing preference amongst younger generations to live in share households. This is not only helping them to address the financial issues head on but can also help with other disadvantages associated with living alone such as a lower level of wellbeing.
‘If properly considered and developed, this lifestyle trend could go some way in addressing the predicted uplift in those living alone over the next two decades and the negative impact that this could have on this segment of the population.’