## North West Dominates UK HMO Market

The North West region has emerged as the leading area for Houses in Multiple Occupation (HMOs) in the UK, representing 17.9% of the total HMO stock nationwide. This surpasses Greater London, which holds 16.5%, despite the capital’s traditionally strong rental market and higher property prices. The data, provided by property management platform Lendlord, underlines the North West’s increasing importance for landlords targeting higher-yielding assets within the private rented sector.

This concentration of HMOs in the North West reflects a shift in landlord focus towards northern markets, where entry costs tend to be lower and rental yields higher compared to London. While London continues to command the highest average property values and rental incomes, the North West’s expanding HMO stock offers an attractive alternative for investors seeking strong returns.

## Rental Yields and Property Values Across Regions

Although the North West leads in HMO volume, the North East boasts the highest average rental yield at 15.1%, marginally down from 15.4% the previous year. However, the North East accounts for only 3.6% of the UK’s HMO stock, indicating a smaller but highly profitable market segment. Nationally, average HMO yields have declined slightly to 9.6% from 10.4%, as property values in some areas have increased faster than rents.

London remains the most expensive HMO market, with average property prices reaching £684,724—an increase of £24,497 year on year. Correspondingly, London also delivers the highest annual rental income at £55,017. In contrast, the North East’s average HMO property value is £232,461, illustrating the significant price gap landlords face when balancing affordability against income potential.

## The Growing Importance of HMOs for Landlords

Aviram Shahar, co-founder and chief executive of Lendlord, emphasised the increasing significance of HMOs for property investors: “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.”

This steady rental growth, combined with the expanding HMO stock in regions like the North West, signals strong ongoing demand for shared accommodation. For landlords, HMOs continue to represent a valuable asset class capable of delivering higher yields compared to traditional single-let properties, particularly outside London.

## Implications for UK Landlords and Agents

The data suggests that UK landlords and letting agents should consider the North West and other northern regions as key areas for HMO investment. While London remains attractive for its rental income potential, the high property prices and slightly lower yields may limit entry for some investors. Conversely, northern markets offer a balance of affordability and strong rental returns, making them increasingly competitive.

Landlords should also be aware of the slight downward trend in yields nationally, which reflects rising property values outpacing rent increases in certain locations. Careful market analysis and ongoing rent reviews will be essential to maintain profitability in the evolving HMO sector.

Suggested internal link anchors
– Houses in Multiple Occupation (HMOs)
– rental yields
– property values
– private rented sector
– landlord investment strategies
– rental income growth
– regional property markets
– letting agents
– property management
– shared accommodation
– landlord market trends
– HMO regulations

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/