A new index from Lendlord’s HMO Data Analysis Report reveals significant regional contrasts in the UK’s HMO market. The analysis, based on data from 1,126 properties, highlights key trends for landlords and investors.

Key Findings

  • Highest Yields:
    • Found in the North East, with the lowest price-to-rent ratio of 2.7 years.
  • Property Values & Rental Income:
    • Highest Average Property Value: Greater London (£660,227).
    • Highest Annual Rental Income: South East (£46,041).
  • Average Metrics:
    • UK-wide HMO yield: 10.4%.
    • Price-to-rent ratio: 4.2 years (ranging from 2.7 years in the North East to 6.5 years in Greater London).

Regional Insights

  • Greater London:
    • Dominates the market (20.6% of HMOs) but offers lower yields compared to northern regions.
  • South East:
    • Delivers the highest rental income, offering a balanced investment option.
  • Key Northern Regions:
    • West Midlands (11.8% market share) and North West (15.1%) reflect strong performance, with lower property prices and higher yields.
    • Clear North-South divide in property values and investment efficiency.

Trend Analysis

  • Inverse correlation between property values and yields highlights opportunities in regions with lower property prices.
  • The North East offers the best returns for investors prioritising high yields, while the South East provides stability with strong rental income.

Commentary

Aviram Shahar, CEO of Lendlord, states:
“The HMO market remains a cornerstone of the UK’s rental sector, offering significant opportunities for landlords and investors. This report provides the data-driven insights necessary for strategic decision-making in this dynamic sector.”

Lendlord’s Q4 2024 HMO statistics are available here: https://lendlord.io/hmo-data