North West leads HMO market share as yields edge below 10%

The North West has the highest proportion of HMOs in the UK at 17.9%, narrowly ahead of Greater London at 16.5%, new data from property management and financial platform Lendlord reveals.

The findings form part of Lendlord’s Q4 2025 HMO Data Analysis Report, based on a sample of 1,158 HMO properties. The report examines regional variations in property values, rental yields and market distribution, offering a snapshot of how the sector is performing at the close of 2025.

While the North West accounts for the largest share of HMOs, it is the North East that records the highest average yield at 15.1%, albeit slightly down from 15.4% in Q4 2024.

Despite this, the region represents just 3.6% of the UK’s HMO stock within the sample, underlining the disparity between yield performance and overall market concentration.

Across the UK as a whole, the average HMO yield has fallen to 9.6%, down from 10.4% in Q4 2024. However, average annual rents have risen markedly over the same period, increasing by more than £5,000 year on year, from £28,200 in Q4 2024 to £33,400 in Q4 2025.

REGIONAL DIVIDE IN VALUES AND INCOME

Greater London continues to command the highest average property values, with HMOs in the capital reaching £684,724 in Q4 2025. This represents an increase of £24,497 compared with Q4 2024.

By contrast, the North East records the lowest average property value at £232,461, highlighting a substantial regional gap in capital values.

London also leads on rental income, with the highest average annual rental income at £55,017. This compares with lower property values but stronger yield performance in regions such as the North East.

The data points to an increasingly polarised HMO market, with higher-value, lower-yielding assets concentrated in London and parts of the South, and stronger yields available in lower-value regional markets.

Aviram Shahar, co-founder and chief executive of Lendlord, said: “The importance of HMOs to property investors has never been clearer and our Q4 2025 figures highlight that yields have remained fairly constant year on year with the average annual rent increasing by an impressive £5,000 in just one year.

“Our platform is designed to simplify property management and empower smarter investment choices to ensure our users can confidently navigate the complexities and ongoing challenges that they face as property investors.”