The iconic cast of the television series “Friends” not only entertained viewers but also set a precedent as role models for an entire generation. They epitomized the aspiration of co-living, experiencing the ups and downs of life together in a shared apartment. This mirrors the modern trend in England and Wales, where ‘Homes in Multiple Occupation’ (HMOs) have become a cornerstone of the rental market. Currently, there are over half a million HMOs in these regions, providing a practical and cost-effective housing solution for countless renters.
From an investment perspective, HMOs present a lucrative opportunity. In the North West, for instance, the potential gross yields for investors average an impressive 7.9%. Manchester stands out in this landscape with its student rental stock witnessing a robust growth of 26.5% in a short span of five years.
Diving deeper into the numbers, research from The HMO Hub has illuminated an interesting fact: HMOs consistently offer higher gross yields than their counterparts, the standard buy-to-let properties. This makes them an enticing proposition for potential investors.
It’s worth noting that while London boasts the largest stock of HMOs, the crown for the highest yields does not belong to the capital. Instead, regions like the North West, North East, and Wales emerge as the top contenders in this aspect.
For those interested in the source of these insights, they have been collated and reported by the likes of Dataloft Rental Market Analytics, which bases its findings on scenarios like three renters occupying a 3-bedroom property, as well as from DLUHC (2022), StatsWales (2021), the Land Registry, Cushman & Wakefield (2023), and The HMO Hub (2020).