HMOs increase in Buy To Let businesses

Posted: 13/4/2024

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Houses in multiple occupation (HMOs) are making up an increasing percentage of buy-to-let business, according to data from specialist lender Shawbrook.

In both 2022 and 2023, HMOs made up just over a quarter – 27% – of all Shawbrook’s buy-to-let business. However, as landlords place further emphasis on diversifying their portfolios, this number has already risen to more than a third (34%) in 2024. There has also been a rise in HMO business from non-portfolio landlords, from 17% to 21% over the same period.

However, investors need to be aware that there are more rules and regulations for HMOs than a normal buy-to-let. For a start, an HMO must be licensed and must have planning consent. If it doesn't investors need to look carefully at whether or not they are likely to be able to obtain consent. There are also tighter safety requirements for HMOs, and landlords could risk heavy fines if they fall foul of these. So buying at HMO needs proper consideration.

In general though, HMOs can be more profitable than other BTLs, all be it with extra work and risk.

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