England’s HMO market valued at £26bn – Revolution Brokers

According to analysis from Revolution Brokers, there are 55,849 operational HMOs in the English rental market, with an average individual value of £464,546. 

London is the region with the most valuable HMOs and accounts for the highest proportion of this property type with 13,528 residences (or 24 per cent of the market). In the capital, the average price of an HMO is £826,209 and combined, the properties have a value of £11.2bn. 

The East Midlands has the second highest number of shared tenancy households, with its 10,737 residences accounting for 19 per cent of England’s total stock. With an average price of £274,126 per HMO, the total market value is the fourth highest at £2.9bn. 

In terms of market value, the South West is second at £3.8bn and the South East is third at £3.3bn. 

The North East has the fewest number of HMOs, with just 715 properties making up 1.3 per cent of England’s total. However, HMOs in this region are the most affordable, with an average value of £263,024. In total, the North East’s HMO market is worth £118m. 

Market under scrunity 

Almas Uddin, founding director of Revolution Brokers, said: “We’ve now started to see the HMO sector come under the same scrutiny as the wider buy-to-let space when it comes to a raft of new rules and regulations designed to improve tenant welfare.  

“While this is, of course, a step in the right direction, it means additional time and money spent by HMO providers to ensure they are operating above board.”  

He added: “The worry is that these additional requirements may deter HMO investment and reduce the level of suitable HMOs that are available, leaving tenants with no choice but to rent from those who were already providing below-par accommodation and will no doubt continue to do so.  

“The good news is that so far, this doesn’t seem to be the case and the nation’s HMO portfolio not only remains robust, but is worth an incredible sum in the current market.”