A former tenant turned property investor from Norwich is trying to challenge the stigma around HMOs (Houses of Multiple Occupation).
Hotel-standard living isn’t the first thing most people think of when they think of an HMO or house share, but it’s exactly what Matthew Willcock, director of AM Living, is trying to achieve.
Matthew set up the Norwich-based hybrid letting agency and property management company in 2012 after noticing a gap in the market – and it was all inspired by his own experience as a tenant.
As a student in London, Matthew says he’d paid “astronomical” rent. “All of my friends were getting grouped together for second year, and they were all budgeting five, six, seven hundred pounds each to take on some horrendous house,” he explains.
“A two-bed flat came up for sale next door to my halls, in WC1, central London, zone one, and I said to my parents – a very, very privileged position – ‘if you guys could buy this property, I think I could rent out the second room to pay your mortgage and to pay my bills and a little bit extra’,” So that’s what they did.
As a result, Matthew lived in London, rent-free, for five years, the equity in his parents’ London home went up and he got first-hand experience of managing a tenancy – which inspired him to do it again.
Knowing that property prices in London were just too high, he moved back to Norwich and bought his first property on Thorpe Road, which he let out room by room. “This is before people really knew what an HMO was, this was before there was barely a licence – none of it really existed,” he says, so he learnt as he went.
“I ended up working for some London investors managing their Norwich HMO portfolio and learnt lots, made mine legal, compliant, and did lots of courses on the legal side of lettings. Fast forward, probably to 2017, I was able to re-finance my one property and bought two more.”
Since then, AM Living has grown. Today, it has around 60 properties in its portfolio and specialises in multi-let properties aimed at students and young professionals.
Matthew now employs two members of staff, Claire Thacker and Steff Barker, who both are or have been long-term tenants themselves, so know what others expect. “They’re both very much tenant first, and I love that,” says Matthew.
But what the properties all have in common, he says, is their high standard. “I think every property that I’ve got is much, much nicer than my own,” he says. “I just wanted to create something that is somewhere I would want to live, no matter what, but also that’s just aspirational living because I want to attract good rents and I want to attract good tenants.”
At an AM Living property, Matthew says double rooms cost about £500-£550 and rise to £600-£650 for an en suite, with bills included. “For those prices, you’re getting an amazing property, amazing housemates and a contract we can get out the same day if somebody needs to move in urgently. We’re super flexible, so all our tenants sign six-month ASTs [Assured Shorthold Tenancies] and after five months, we ask them if they want to a sign a new six month [contract].
“They’re always under contract, but within our contract it says if you need to leave, we’ll find a new suitable housemate and you can leave. If you let us know that in a month’s time you want to leave your room, I can guarantee we will find somebody to take your room on the day you want to move out. All we ask is that you can pay up until the new person moves in. It gives people flexible living without all the utility stuff to worry about as well.”
In the last 12 months, Matthew says they’ve had to increase rents to cover rising energy costs – but only by around £25 a month, and the costs are locked in for the duration of a tenant’s contract.
“There has been a lot of pressure on us from the landlords to make small increases, because they’re absorbing all of the energy costs, so we have put things up but it’s been by a relatively small amount. The landlord is still absorbing a lot of that energy cost – but it’s important for us to be able to keep our prices reasonable so that we can still get the right tenants.”
According to AM Living’s website, it has a 99pc occupancy in managed stock and the average time to fill vacant rooms is four days – but getting the right tenants is something of a balancing act.
“If we’re putting together a six-bed house from scratch, we’ve essentially got to choose six personalities that we hope are going to work well together,” says Matthew. “You’re doing a lot of kind of gut instincts and stuff like that, but it’s tricky, so you want to be able to show as many people round as possible.”
Matthew says he has mixed feelings about the Government’s Renters Reform Bill, which was announced earlier this year, and includes abolishing Section 21 ‘no fault’ evictions, but he says it’s not for the reasons many might think.
“If we’ve got somebody in a property that’s not right for the property – you know, we have a six-bed house and one person is consistently upsetting other people, we will talk a lot to the five people that are upset and manage it as well as possible, but if it gets to a point where that person has been isolated by the other housemates, where they’ve isolated themselves, in most cases, we need to be able to politely ask them to look for alternative accommodation.”
In these cases, the team use a Section 21 eviction, giving the tenant two months’ notice, without blame, and while the proposals will offer landlords an alternative, Matthew says it’s not their preferred way of going about it.
But he does agree that there should be more legislation for the private rented sector as a whole.
“I think there needs to be stricter legislation for the private rental sector in terms of keeping on top of damp and mould and tenants being able to feel like they can complain and not be evicted, because I think that was one of the arguments – that tenants keep quiet because they’re worried they’re going to be evicted from complaining, and that’s not right.”
But every time the Government enforces changes on landlords, he says, tenants absorb 100pc of the cost. “Young, liberal tenants are voting in policies that they think are penalising landlords [but] are only penalising them [because] it’s not how the Government phrase it,” he says. “Rents have almost gone up by 50pc, if not more, in the last 12 months, especially for our single-let properties, and it’s all through the fault of the Government putting restrictions on landlords.”
When we speak, Matthew has just finished letting out one of AM Living’s newest listings, Wensum House, a 16-bed shared property on Dereham Road. It was a former guesthouse before being bought by developers, who then got Matthew and his team in to help design it.
“Covid made us think a lot more about working from home,” he says, so the design includes lots of communal areas and co-working spaces, as well as different areas to help tenants better separate work and home life.
There’s a real – and perhaps undervalued – sense of social responsibility to what Matthew and his team are doing, from the standards they set, in terms of accommodation, to the flexibility they offer in the contract. And awareness of things like mental health play a big part too.
“We want rooms to make people feel good and happy and support mental health,” he says. “It’s not going to be on the agenda for your average agent, but I think it should be for anyone providing shared accommodation.
“[Tenants] live in their room and they control their room, but essentially we are in charge of the rest of the property, so it’s up to us to make sure it’s a nice experience for them.
“Everyone I work with locally, of my age group, is really trying to make a difference. Everything is so design-led. It’s all about biophilic design, so loads of plants in properties, and about getting light into properties because that’s really important for mental health.”
The team has just been nominated for a national HMO award and the ceremony will take place at the end of the month.
Longer term, Matthew says he’d like to employ another full-time member of staff and attract more good-quality landlords – landlords that love their property, respect their tenants and understand that their tenants have got to live in this property, he says. “Would you put your own children in this property? If the answer’s no, there’s a mismatch for us.”
Part of the five-year plan is to grow their reach even further and he hopes that over the next few years they can expand the agency, serving both landlords and tenants, in another city like Cambridge.
“Aside from that, I would love to do some purpose-built accommodation – professional, purpose-built accommodation, a bit like we’ve just done at Wensum House,” he says. “I’d like to do that again but do it ourselves, probably spend a bit more money and really get it exactly how we want it.”
The days of HMOs being grimy bedsits with tatty communal spaces are long gone, and Matthew says AM Living is really trying to challenge that stigma.
“I don’t feel like Norwich knows what HMOs are like now and what they should be like now. It’s not what your parents were providing or your friend’s parents were providing. It’s different. It’s really cool living. It’s good fun. It’s like hotel living.”
Visit amliving.co.uk for more information.
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