North East is top region for HMO yields

Lendlord has published its first HMO Data Analysis Report, providing detailed insights into the Houses in Multiple Occupation (HMO) market for the final quarter 2024.

Using data from 1,126 HMO properties, this report reveals regional trends in property values, rental yields, and market distribution, empowering landlords, brokers, and property investors with actionable insights.

The data highlights significant disparities in regional performance, with Greater London leading in average property value (£660,227), while the North East offers the highest average yield (15.4%). Key trends include an inverse correlation between property values and yields, demonstrating opportunities for investors to maximise returns in regions with lower property prices but higher yields.

Key findings from the report include:

15.4%: Highest average yield (North East).
£660,227: Highest average property value (Greater London).
£46,041: Highest annual rental income (South East).
Average HMO yield across the UK: 10.4%.
Regional price-to-rent ratios range from 2.7 years (North East) to 6.5 years (Greater London), with an average of 4.2 years.

The report shows a stark contrasts between regions. Greater London dominates the market, accounting for 20.6% of all HMOs analysed, yet offers lower yields compared to the North East, where investors can achieve the highest returns. Meanwhile, the South East delivers the highest annual rental income at £46,041, making it a compelling option for landlords seeking a balance between capital value and rental returns.

Further findings reveal that regions like the West Midlands (11.8% market share) and the North West (15.1% market share) play pivotal roles in the HMO landscape, reflecting a clear North-South divide in property values and investment efficiency.

Aviram Shahar (pictured), co-founder and CEO of Lendlord, said: “The HMO market remains a cornerstone of the UK’s rental sector, offering significant opportunities for landlords and investors. However, maximising its potential requires clear, data-driven insights. This report highlights key trends and regional disparities, providing landlords and brokers with the information they need to make informed, strategic decisions.

“At Lendlord, we’re committed to leveraging technology to simplify property management and empower smarter investment choices, ensuring our users can confidently navigate the complexities of the market.”