Landlords operating Houses in Multiple Occupation (HMOs) are demonstrating resilience in the face of rising property improvement costs, with many committed to expanding their portfolios. Recent data shows that 80% of HMO landlords plan to either maintain or grow their property holdings over the next year, highlighting a strong investment sentiment in this sector.
What are the current investment trends among HMO landlords?
Investment activity remains robust, with 62% of HMO landlords having made property improvements in the last six months, and an additional 24% having done so within the past year. This trend is expected to continue, as 54% of landlords indicate they are very likely to undertake further upgrades in the next 12 months, while 18% are already in the midst of renovations.
How do HMOs compare to other rental properties?
HMOs are increasingly viewed as lucrative investments, with 82% of landlords reporting that they yield better rental returns compared to traditional residential lettings. Notably, 79% of landlords have seen stronger overall returns from their HMO investments. According to lending data from Paragon Bank, HMOs generated an average yield of 8.9% in Q2 2026, outperforming all other property types.
What does this mean for landlords?
The commitment to investing in HMOs despite the rising costs of improvements suggests that landlords are confident in the long-term profitability of this property type. With many landlords planning to enhance their properties, this could lead to improved living conditions for tenants and potentially higher rental prices. Landlords should closely monitor market trends and rental demand to maximise their investment returns.
Frequently asked questions
What are the benefits of investing in HMOs?
Investing in HMOs typically offers higher rental yields compared to traditional buy-to-let properties, making them an attractive option for landlords seeking better returns.
How can landlords finance improvements to their properties?
Landlords can explore various financing options, including remortgaging, personal loans, or specific buy-to-let mortgages designed for property improvements.