Over the last year we have collated the data from 60+ completed HMO investment surveys by different valuers all across the country. Our aim was to give property investors an idea of what a realistic valuation of their property could be, given countrywide averages.
HMO valuation calculator
Generally, to calculate a probable valuation, we calculate number of rooms X the average annual nett rent charged per unit X the nett yield.
Of course, this is only a rough guide based on the data as valuers will base their figures on the market rent rather than a premier rent based on the quality of the property’s finishings etc.
For example:
If someone is receiving a rent of £100 per week for 6 rooms outside of London, this gives an annual gross rent of £31,200 and an annual nett rent of £26,149. To calculate the probable valuation, multiply this by the nett yield average of 8.32%, which gives a value of £314,290 for the property.
Broken out, the calculation is as follows:
6 rooms X £100 weekly gross rent X 52 weeks = £31,200 annual gross rent
£31,200 annual gross rent – 16.19% management fees = £26,149 annual nett rent
£26,149 annual nett rent X 8.32% net yield average = HMO valuation of £314,290
Within the 60 reports 7 were within London postcodes, so we have been able to review the whole country and then split London from the figures. Below are the averages we calculated from the surveys analysed.
| Whole country average | London average | Rest of country average
|
|
| Value per unit | £550,666 | £1,092,142 | £479,150 |
| Gross yield | 9.71% | 7.85% | 9.96% |
| Nett yield | 8.08% | 6.28% | 8.32% |
| % of management fees deducted | 16.35% | 17.57% | 16.19% |
| Annual gross rent charged per unit | £49,382 | £71,694 | 46,435 |
| Annual nett rent charged per unit | £41,239 | £58,831 | £38,916 |
| Weekly gross rent per room | £156 | £189 | £151 |
| Weekly nett rent per room | £130 | £155 | £126 |
Feel free to download this information in a printable form: HMO Calculator Jan23.