HMO landlords plan to invest over £10,000 on property improvements, research reveals
80% said they intend to increase or maintain their portfolio in the year ahead.
Experienced houses in multiple occupation (HMO) landlords are planning to spend more than £10,000 on property improvements in the next 12 months, Paragon Bank has found.
80% said they intend to increase or maintain their portfolio in the year ahead.
Investment activity remains strong, with 62% improving a property in the past six months and a further 24% doing so within the past year.
54% said they were extremely likely to carry out further improvements in the next 12 months, while 18% are already upgrading properties.
When asked about spending plans, 28% said more than £10,000 was the most common response and another 15% expect to spend between £5,001 and £10,000.
Works include decoration, kitchen and bathroom upgrades, compliance and safety improvements, and energy efficiency.
Its lending data showed HMOs generated an average yield of 8.90% in Q2 2026, the highest of any property type recorded by the bank.
82% agreed HMOs offer better rental yields than other properties and 79% said they generate better profitable returns.
Louisa Sedgwick (pictured), managing director of mortgages at Paragon Bank, said: “These findings show that many houses in multiple occupation home providers are experienced operators who continue to take a long-term view of the sector.
“Houses in multiple occupation can be more complex to manage than standard buy-to-let properties, but they remain attractive to landlords who understand the market and have the expertise to operate successfully within it.
“What stands out is that landlords are continuing to invest as standards, costs and regulation evolve.”
Sedgwick added: “The level of planned expenditure suggests that many are focused on maintaining quality, supporting compliance and ensuring their properties remain well positioned over the long term.
“For brokers, this creates opportunities to support landlords who are reviewing their portfolios, funding improvement works or looking to structure borrowing around more specialist property types.
“Understanding the reasons behind that investment, whether linked to asset quality, regulatory requirements or long-term returns, is increasingly important when advising clients in the houses in multiple occupation market.”
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