The highest yields from HMOs are found in the north east of England according to a new index produced by a financial platform. 

The highest average HMO property value is unsurprisingly in Greater London, at £660,227, while the average highest annual rental income is in south east England, at £46,041.

Average HMO yield across the UK is 10.4% and the regional price-to-rent ratio ranges from 2.7 years (in the North East) to 6.5 years (Greater London), with an average of 4.2 years.

The data comes from Lendlord’s inaugural HMO Data Analysis Report, relating to the HMO market for Q4 2024 and drawing on data from 1,126 HMO properties.

Key trends include an inverse correlation between property values and yields, demonstrating opportunities for investors to maximise returns in regions with lower property prices but higher yields.

The report sheds light on the stark contrasts between regions. 

Greater London dominates the market, accounting for 20.6% of all HMOs analysed, yet offers lower yields compared to the North East, where investors can achieve the highest returns. Meanwhile, the South East delivers the highest annual rental income at £46,041, making it a compelling option for landlords seeking a balance between capital value and rental returns.

Further findings reveal that regions like the West Midlands (11.8% market share) and the North West (15.1% market share) play pivotal roles in the HMO landscape, reflecting a clear North-South divide in property values and investment efficiency.

Aviram Shahar, co-founder and chief executive of Lendlord, comments: “The HMO market remains a cornerstone of the UK’s rental sector, offering significant opportunities for landlords and investors. However, maximising its potential requires clear, data-driven insights. This report highlights key trends and regional disparities, providing landlords and brokers with the information they need to make informed, strategic decisions.”

Lendlord’s Q4 2024 HMO statistics are available here: https://lendlord.io/hmo-data