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Financing HMO Projects – Correctly

West London landlord Sanjay Kumar talks with Editor, Richard Bowser

In folklore going back hundreds of years, a quotation is attributed to a wealthy 14th century London merchant, Richard (Dick) Whittington, that the streets of London are ‘paved with gold’. The reality, as many attracted to the capital quickly discover is somewhat different, and the cost of accommodation in London - relative to average earnings – is very high today compared to any other UK regional city.

Each year a large number of young people arrive in London to establish a foothold on their career ladder, only to discover that for many, their net income leaves them very little left over to enjoy the many cultural and leisure opportunities on offer. The cost of accommodation in London reached an all-time high relative to average earnings a few years ago and as such, many who arrive to find work have no choice other than to stay in shared accommodation rooms (HMOs) in their first few years.

And yet, despite the ever growing demand and rises in rent levels for good quality rooms, many HMO landlords - around London - are no longer adding to their portfolios and some are exiting the sector as increases in taxes and regulations make the business model, around London, more questionable - (for further info on HMOs, check articles in the PIN September edition).

Given all the above I was keen to discover, during a recent interview with west London based Sanjay Kumar, how he has been expanding his portfolio at a time when others are being cautious.

I met with Sanjay and his mortgage and finance specialist Karl Griggs of CPC Finance, to view one of his latest projects in West Drayton. The property in question is one of a number of HMO properties that Sanjay and his business partner Malkit Purewal have created in the local area as he (Sanjay) explains.

“I am a jeweler by trade, as are my family, and I have been doing property investing for over 17 years. I started out with some buy to lets and progressed to doing
small developments for around seven years, with HMOs and more recently some conversions of commercial buildings.

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