Rising rents and squeezed affordability have driven more people towards shared living, particularly students, young professionals, and key workers. For landlords, HMOs have become an appealing alternative to traditional buy-to-lets, promising stronger yields and more stable income streams.
For tenants, they’re often a lifeline – a way to stay in city locations without impossible rents. Yet, as with most things in property, what looks good on paper can quickly get complicated. Running an HMO isn’t just a matter of splitting the house into rooms and handing out keys.
It’s a heavily regulated world, full of licensing schemes, safety standards, and inspections that vary from council to council. Even the definition can be confusing. A property with three or more tenants from different households sharing facilities counts as an HMO, while those with five or more need a licence.
Add a conversion, a self-contained flat, or an older building into the mix, and the rules can shift again. Despite that, the numbers don’t lie. Many landlords are reporting that HMO income levels are roughly double those from standard lets. Rising demand has helped keep occupancy high, and yields are still holding firm despite higher running costs.
For some, it’s the perfect way to make property investing stack up again in an era of tighter margins and tougher lending conditions. Yet there’s another side to this boom. Councils up and down the country are tightening control through Article 4 directions, removing the automatic right to convert a home into an HMO without planning consent.
Oldham and Spelthorne are just two of the latest examples. The aim is to balance communities and stop entire streets turning into shared houses. The effect, however, could be to limit supply even further – making it harder for renters to find affordable rooms just when demand is peaking.
Local opinion is divided. Some residents see HMOs as an answer to the housing shortage; others view them as overcrowded, transient, and prone to poor management. Much depends on the operator. A well-run HMO, with clear house rules, regular maintenance, and a proactive landlord, can add stability to a neighbourhood.
A badly managed one can do the opposite. For anyone considering stepping into the HMO space, it’s worth remembering that success depends on more than yields. Fire safety doors, regular inspections, gas and electrical checks, and the right management approach all add up.
Lenders also take a closer look, with stricter mortgage conditions and higher deposit requirements compared with standard buy-to-lets. Still, HMOs remain a vital part of the UK’s housing mix. They offer flexibility, affordability, and density where we need it most.
Whether they’re a shared living solution or a shared headache depends largely on who’s running them – and how the rules are applied locally.
On this week’s Property Quorum, Gareth Wax is in the chair with Juliet Baboolal, Chris Gilsenan, and myself, Hamish McLay, as we look at what’s really driving the HMO boom. From licensing challenges to local controls, we’ll be exploring whether shared living is a fix for today’s market pressures or a fast-track to regulatory headaches.
Catch the conversation live on Thursday at 10am and join the debate on our YouTube channel: https://www.youtube.com/@SpillingTheProper-Tea
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