More Buy-to-Let Investors Choose HMOs To Expand Their Investment Reach

Specialized lender Shawbrook’s statistics reveal that investors choose HMOs (houses in multiple occupancy) which constitute a growing share of buy-to-let transactions.

During 2022 and 2023, HMO properties represented 27% of Shawbrook’s buy-to-let business. In 2024, they have climbed to over a third at 34%, as property owners increasingly seek variety in their investments. HMO activity has also seen growth among investors who don’t hold large portfolios, rising from 17% to 21% in the same timeframe.

Daryl Norkett, director of real estate proposition at Shawbrook, notes: “Landlords have found HMOs to be a sturdy investment choice as they navigate through the difficulties brought on by the pandemic and recent economic uncertainty. These investments offer diversification for seasoned landlords and are attractive for new investors as well.”

“HMOs with consistent tenant turnover can sustain higher interest rates through robust rental yields and keep up with current market rents. Additionally, the potential to remodel standard properties into HMOs for improved earnings has been appealing, helping landlords adapt to a challenging economic landscape.

“We’ve enhanced our lending criteria for HMOs, which allows for larger loans, and we’ve seen a modest uptick in HMO dealings. Once anticipated interest rate cuts take effect, we foresee even more growth in this sector.”